Consumer confidence lowest since 1982

Survey from the University of Michigan says uncertain consumers intend to save their money rather than spend it.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

Rising food prices have changed…
  • My eating habits
  • My shopping habits
  • My lifestyle
  • Nothing

NEW YORK (CNNMoney.com) -- Consumer confidence sank to its lowest level in 26 years, according to a survey published Friday.

The University of Michigan Consumer Confidence survey revealed that high food and fuel prices, coupled with shrinking incomes and falling home values, have driven consumers to save their money rather than spend it.

"The recent acceleration in the loss in confidence indicates a longer and potentially deeper recession," said Richard Curtin, the university's consumer survey research director.

The survey's Index of Consumer Sentiment, a closely watched indicator of the economy's current health, fell to 62.6 in April, a drop of 6.9 points from the previous month and the lowest level since 1982.

The Index of Consumer Expectations, which economists use to help determine the economy's future direction, fell to 53.3 in April, a decline of 6.8 points from the previous month.

According to the survey, only 30% of consumers plan to spend their upcoming tax rebate, while the rest said they would use it to pay off debt or put it into savings.

Though the stimulus rebates, due to start arriving in mailboxes next week, will boost spending temporarily, rising prices for food, gas and other essentials along with worries about income levels could cause consumers to spend less through late 2008 and early 2009, according to Curtin.

The survey said that 90% of consumers believed the economy was in a recession, and 75% believed the economic problems will persist for at least another year.

A third of those surveyed specifically said that they were reigning in spending because of uncertainty about employment and income. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
8 of the world's craziest fast food items American food chains operating abroad must cater to local tastes to succeed. The results are spectacular. More
Inside the $50,000 Emmys swag bags If getting nominated or presenting an Emmy award isn't prize enough, celebrities come away from TV's big night with luxury goods and vacations worth $50,000. Take a peek at some of this year's luxe giveaways. More
10 most expensive cars sold at Pebble Beach These multi-million-dollar cars sold for top dollar at this year's Pebble Beach collector car auctions. More


Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.