- Tom Silva
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Santa Claus Doesn’t Deliver Consumer Confidence
Consumer confidence fell to an all-time low in December, despite the fact it was in the midst of the annual Christmas-shopping frenzy. The reasons for this new low include deepening job insecurity, fast-deteriorating housing markets, and declining asset values. According to the Conference Board, the Consumer Confidence Index fell to 38 in December, compared with the 44.7 reported during November. The Present Situation index, which measures respondents’ attitudes to business conditions and employment prospects, fell to 29.4 in December, compared with 42.3 in November. That is close to the levels last seen during the 1990-1991 recession.
With the nation’s unemployment rate rising to 6.7 percent during November, the Board warns of more layoffs during the first six months of 2009. Respondents to the Conference Board’s survey of 5,000 American households who believe that jobs are “hard to get” rose to 42 percent in December, from 37.1 percent during the previous month.
This consumer confidence extends to commercial real estate, where values are in a gray zone, awaiting the inevitable write downs and workouts that will attend a slow recovery. Until this happens, many buyers and sellers feel in limbo. The simple formula to fix this is: somebody needs to get off the dime. To quote a couple of clichés, nothing succeeds like success and no news isn’t always good news in a credit crunch.