Consumer confidence
unexpectedly fell in December for the sixth time in seven months
as unemployment threatens to undermine spending and U.S. economic
growth early next year.
“You have a nervous, nervous consumer,” said Delos Smith, a
senior business analyst at the Conference Board. The group’s
present conditions index fell to the lowest since January 1994.
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Crude oil prices at $31 a barrel are close to two-year highs,
6 percent unemployment is the highest since 1994 and there’s a
threat of war with Iraq. Retailers, following the smallest
increase in holiday shopping in more than three decades, may be
hard pressed to attract consumers who account for two-thirds of
the economy.
“With worries mounting, it’s not all that surprising that
consumer spending appears to have fizzled,” said Joseph Abate, a
senior economist at Lehman Brothers Inc. in New York, who forecast
that confidence would drop to 82, the lowest in the Bloomberg News
survey.
Sales gains for December were below forecasts at Target Corp.
and Wal-Mart Stores Inc., and some shoppers may have been
displeased that post-Christmas discounts weren’t much better than
before Dec. 25, analysts said. Retailers cut prices by as much as
75 percent early in the season to attract budget-conscious
shoppers concerned about jobs, credit-card debt and the economy.
Bloomberg News
