The 38.0 index reading eclipsed the previous record low of 38.8 in October, and was weaker than the 45.5 reading which had been forecast by analysts.
The quarter was marked by an escalating global financial crisis, and massive government efforts to bail out banks and unblock frozen credit, rising unemployment and plunging home values.
The present situation index, a gauge of consumers' assessment of current economic conditions, plummeted to 29.4 in December from 42.3. The index is now close to levels last seen in the months following the 1990-1991 recession but is not as low as levels reached during the 1981-1982 recession.
Consumer expectations for the state of economic activity over the next six months also decreased, to 43.8 in December from 46.2 in November.
Said Lynn Franco, Director of The Conference Board Consumer Research Center: “The further erosion of the Consumer Confidence Index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008. The Present Situation Index is now close to levels last seen in the months following the 1990-91 recession, but is not as low as levels reached during the 1981-82 recession. Declines in the Expectations Index appear to be moderating, but this index continues to hover at historical lows. Both sub-indexes bear careful watching over the next several months to see if they are starting to show signs of approaching a bottom. In the meantime, however, the overall economic outlook remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half.”
Consumers' appraisal of current conditions grew substantially worse in December. Those claiming business conditions are “bad” increased to 46.0% from 40.6%, while those claiming business conditions are “good” declined to 7.7% from 10.1% last month. Consumers' assessment of the labor market was also considerably more negative than a month ago. Those saying jobs are “hard to get” rose to 42.0% from 37.1% in November, while those claiming jobs are “plentiful” decreased to 6.2% from 8.7%.
Consumers' short-term outlook was only moderately more pessimistic. Those anticipating business conditions to worsen over the next six months increased to 32.8% from 28.3%, while those expecting conditions to improve rose to 13.4% from 11.5%. The outlook for the labor market was also somewhat mixed.
The percent of consumers anticipating fewer jobs in the months ahead increased to 41.0% from 33.7%, while those expecting more jobs increased to 9.7% from 9.2%. The proportion of consumers anticipating an increase in their incomes decreased to 12.7% from 13.1%.
