The New York-based research group Conference Board said Tuesday that its Consumer Confidence Index dropped to 50.4 from a revised 58.1 in May. The reading was the lowest since February 1992, when it was 47.3.

Economists had expected the index to decline to 56, according to Briefing.com.

Because I accidentally and stupidly made this political by mentioning that dreaded "B" word, here's what your two presumptive presidential candidates (well, actually it was just their campaigns) had to say about the numbers. We'll leave it up to you to guess whose campaign said what (or you could just read the CNN article):

Potential President X: "We know that the public has been concerned and regardless of whether the geeks in the world think there's a recession or not, the public feels like that."

Potential President Y: "The disappointing consumer confidence numbers are yet more evidence that we need a change in our economic policy."

Consumer confidence tumbles to 16-year low [CNNMoney]

The Reuters/University of Michigan Surveys of Consumers index of consumer sentiment dropped to 69.6, the lowest reading since February 1992, and below analysts' median forecast for a preliminary reading of 76.3.

The index was at 78.4 at the end of January.

"The sentiment index has only been this low during the recessions of the mid 1970s, the early 1980s and the early 1990s," survey director Richard Curtin said in a statement.

Consumer confidence plunges [Reuters]
(Photo:Meghann Marco)

There are mounting anecdotal signs that beginning in December Americans cut back significantly on personal consumption, which accounts for 70 percent of the economy.

A raft of consumer companies — high-end stores like Nordstrom and Tiffany, and middle-of-the-road ones like Target and J. C. Penney — reported a pronounced slowdown in growth last month, and in several cases an outright drop in business.

American Express said that starting in early December the growth in the rate of spending by its 52 million cardholders, a generally affluent group of consumers, fell 3 percentage points, from 13 percent to 10 percent, the first slowdown since the 2001 recession.

And consumer confidence, an important barometer of economic health, has plunged. Andrew Kohut, president of the Pew Research Center, says consumer satisfaction with the economy has reached a 15-year low, according to the firm's polling.

Even wealthier consumers, who were seen as invulnerable to rising gasoline prices and falling home values, are feeling the squeeze.

"People are clearly concerned that we are headed into a recession," said Stephen I. Sadove, the chief executive of Saks Fifth Avenue, the upscale department store whose runaway growth throughout much of the year slowed markedly in December.

Even in tough economic times Americans rarely reduce their consumption, preferring instead to slow the growth in their spending. Since 1980, they have cut spending in only five quarters — a total of 15 months — most of them in the depths of a recession. The 2001 recession passed without a cutback in consumer spending.

Only once before, in 1980, did consumer spending fall during a presidential election year, helping Ronald Reagan in his campaign against Jimmy Carter, the Democratic incumbent.

Americans Cut Back Sharply on Spending [NYT] (Thanks, Molly!)
(Photo:Ben Popken)

Newsweek has a 3 page article on why consumers are depressed, but you can probably already guess what factors they're citing.

And yes, the term "perfect storm" was used.

Consumer confidence hits 2-year low [Newsweek] (Thanks, Molly!)
(Photo:swanksalot)

"Delinquencies on these mortgages are likely to rise further in coming quarters as a sizable number of recent-vintage subprime loans experience their first interest rate resets," Bernanke testified.

"Weakness in the housing market will keep construction in a down trend," he said.

He also had some advice for those of you in mortgage meltdown land: "Get in touch with your lender because experience shows the earlier you do so you'll be able to resolve the matter."

Retailers should worry, too: "Indicators of overall consumer sentiment suggested that household spending would grow more slowly, a reading consistent with the expected effects of higher energy prices, tighter credit and continuing weakness in housing," Bernanke said.

He's a cheerful guy, isn't he? We like that about him. Maybe he didn't hear that everything is going to be ok because broke people shop at Walmart.

Fed Chair Warns Congress of Economic Slowdown [NPR]

Maybe another Fed rate cut will help your self-esteem? From Bloomberg (emphasis ours):

The Conference Board's index of consumer confidence declined to 95.6 this month from 99.5 a month earlier. It compared with the median forecast of 99 in a Bloomberg News poll. The U.S. currency reached $1.0511 per Canadian dollar, the lowest since 1960.

Home prices in 20 U.S. metropolitan areas fell 4.4 percent in the 12 months through August, the most since records began in 2001, according to the S&P/Case-Shiller home-price index released today.

The Fed cut its target rate for overnight bank loans by a half-percentage point on Sept. 18 to 4.75 percent, the first reduction since 2003, after losses from subprime mortgage investments roiled credit markets. The dollar has dropped against all 16 of the most-actively traded currencies since then, losing 3 percent against the euro.

Interest-rate futures traded on the Chicago Board of Trade show a 94 percent chance the Fed will lower its benchmark rate by a quarter-percentage point to 4.50 percent tomorrow.

Dollar Falls to Record Low After Consumer Confidence Declines [Bloomberg]
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Lowe's issued a warning about their earnings and Target's September sales numbers are going to be super crappy—time to panic!

From Reuters:

...as skittish consumers rein in spending, fueling concerns that the holiday shopping season could be the weakest in years.

A drop to a two-year low in the Conference Board's consumer confidence index added to the jitters, helping send the Standard & Poor's Retail Index <.RLX> down almost 3 percent.

"The American consumer has been taken through a very rough period. They are cautious; they are careful; they are fearful; and they are acting accordingly," said Kurt Barnard, president of Barnard's Retail Consulting Group. "There's very little that can take place between now and December 31 that is going to materially change that."

So are you consumers broke? Or saving for the holidays? Or what?

Target, Lowe's — more signs of rattled consumers? [Reuters]
(Photo:amyadoyzie)

No longer. Now we are depressed. We've lost our confidence, consumers. Bloomberg reports that consumer confidence took its biggest hit since Hurricane Katrina made us all feel vulnerable and sad. From Bloomberg:

The New York-based Conference Board's index of confidence declined to 105 from 111.9 in July. Economists had expected a reading of 104, according to a Bloomberg survey. Earlier today, another report showed home prices in the U.S. dropped by a record amount in the second quarter.

The housing recession is making it harder for Americans to tap home equity to finance the spending that accounts for 70 percent of the economy. A slowdown in hiring and slimmer pay raises may further weaken consumer sentiment and buying power.

U.S. Consumer Confidence Falls by Most Since 2005 [Bloomberg]
(Photo:Jimmy Legs)

What's the cause for the jump? "An improvement in business conditions and the job market has lifted consumers' spirits in July," said Lynn Franco, director of The Conference Board Consumer Research Center, in a press release.

Do you feel more confident that you did last month? We feel the about the same.

Consumer Confidence At 6 Year High [Reuters]
(Photo:chicanerii)

PREVIOUSLY: Why So Sad? Consumer Confidence Is Down

The Conference Board, based in New York, said that the consumer confidence index fell almost five points, to 103.9, from a revised 108.5 in May, reaching the lowest level since August 2006, when the reading was 100.2. Analysts had expected a reading of 106.

Lynn Franco, director of the board's Consumer Research Center, said in a statement, "A perceived softening in present-day business and employment conditions are the major reasons behind this month's pullback in confidence."

Another Conference Board gauge, called the present situation, which measures how shoppers feel about economic conditions, fell to 127.9, from 136.1 in May.

Still another, the expectations index, measuring shoppers' outlook for the next six months, declined to 87.9, from 90.1.

Economists watch consumer confidence data because such retail spending accounts for a major share of United States economic activity. Retailers have had sluggish sales because of the weaker housing market and the significant rise in gasoline prices.

Consumer Confidence Falls; So Do Sales of New Homes [NYT]

Exhibit A

Exhibit B

The equal voice given to such diametric views serves as a testament to the Trib's editorial integrity.