Consumer confidence plummets

Index of consumer sentiment falls to an all-time low in February and signals more deterioration ahead.

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By Ben Rooney, CNNMoney.com staff writer

When will the economy begin to turn around?
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NEW YORK (CNNMoney.com) -- A key measure of consumer sentiment fell more than expected in February, to the lowest level since its 1967 inception, as Americans remained wary of spending amid the weak economy and rising unemployment.

The Conference Board, a New York-based business research group, said its Consumer Confidence Index fell to 25 in February from a revised reading of 37.4 in January. The index has been touching historic lows since September.

Economists were expecting a reading of 35, according to a survey by Briefing.com.

The index's measure of future expectations about consumer sentiment declined to 27.5 in February from a reading of 42.5 the month before.

"All in all, not only do consumers feel overall economic conditions have grown more dire, but just as disconcerting, they anticipate no improvement in conditions over the next six months," said Lynn Franco, director of the Conference Board Consumer Research Center, in a written statement.

The index, which is based on a survey of 5,000 U.S. households, revealed a bleak outlook for the months ahead.

More than 40% of those surveyed said they expect business conditions to worsen over the next six months. In January, 31% expected worsening conditions.

Consumers are also expecting the job market to deteriorate. The survey showed 47% of those surveyed expect fewer jobs over the next six months, up from 37% the month before.

Economists closely watch measures of consumer sentiment because consumer spending makes up roughly two-thirds of the nation's gross domestic product.

A report due Friday is expected to show that GDP shrank at an annual rate of 5.4% in the last three months of 2008, revised from the 3.8% decline previously reported for the quarter. To top of page

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