BLBG: Consumer Confidence Probably Stayed at Record Low in November
By Bob Willis
Nov. 25 (Bloomberg) -- U.S. consumer confidence probably remained at a record low level in November as falling gasoline prices failed to ease concerns about rising unemployment, economists said before reports today.
The New York-based Conference Board’s index of consumer confidence held at 38 for a second month, according to the median forecast in a Bloomberg survey of 66 economists. That is the lowest level since monthly records began in 1967. Another report from S&P/Case-Shiller may show a record drop in home prices in the 12 months ended in September.
Consumers are retrenching amid increasing job losses, tumbling stock and home prices and the worst credit crunch in seven decades. President-elect Barack Obama said yesterday the U.S. may lose “millions of jobs” next year should the government fail to quickly enact a new economic-stimulus package.
“Serious concerns about job stability and incomes have outweighed the increased confidence consumers were able to derive from falling energy prices,” said Dana Saporta, an economist at Dresdner Kleinwort in New York.
Forecasts for the confidence index ranged from 30 to 45 in the Bloomberg survey. The gauge in October posted its biggest decline since an oil embargo-related plunge in December 1973. The index averaged 103.4 last year. The report is due at 10 a.m. New York time.
Biggest Drop
The S&P/Case-Shiller home-price index, due at 9 a.m., may show values in 20 metropolitan areas declined 16.9 percent from September 2007, the biggest year-over-year drop since records began in 2001. The 12-month gauge has fallen every month since January 2007.
Revised figures from the Commerce Department at 8:30 a.m. may show the economy contracted at a 0.5 percent annual pace in the third quarter, compared with preliminary figures last month showing a 0.3 percent decline, according to economists surveyed by Bloomberg. Consumer spending probably fell at a 3.1 percent rate, unchanged from the preliminary report, economists forecast.
The housing slump, which triggered the credit crisis and global slowdown, will probably extend into a fourth year. Foreclosures are running at a record rate, increasing the number of properties for sale and pushing down home prices.
Lower gasoline prices are one key bright spot for consumers. Average prices for regular unleaded gasoline at the pump have fallen to $1.90 a gallon from an average $3.10 in October.
Political Uncertainty
Consumers may also find comfort from the end of the political uncertainty prior to the presidential election this month, said Mike Schenk, a senior economist at the Credit Union National Association. “Change is something many welcome, no matter who they supported,” he said.
Still, the backdrop for the economy is grim. The jobless rate, at 6.5 percent in October, is the highest since 1994, and could rise as high as 9 percent by the end of 2009, according to the latest estimates from Goldman Sachs Group Inc.
The possibility of collapse at General Motors Corp., Ford Motor Co. or Chrysler Holding LLC poses the prospect of more layoffs.
The economy lost jobs for 10 consecutive months through September, bringing the total drop in payrolls to 1.2 million this year, Labor Department figures showed this month. Some economists anticipate job losses accelerated in November.
Retailers ranging from Best Buy Co. to Nordstrom Inc. are cutting revenue forecasts ahead of what may be the worst holiday shopping season in six years. The International Council of Shopping Centers forecasts the November-December holiday season will be the worst since 2002.
“In 42 years of retailing, we’ve never seen such difficult times for the consumer,” Brian Dunn, Best Buy’s president and chief operating officer, said in a statement last week. “People are making dramatic changes in how much they spend, and we’re not immune from those forces.”
Bloomberg Survey
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GDP GDP Consumer
Annual Prices Conf
QOQ% QOQ% Index
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Date of Release 11/25 11/25 11/25
Observation Period 4Q P 4Q P Nov.
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Median -0.5% 4.2% 38.0
Average -0.5% 4.2% 37.9
High Forecast -0.1% 4.2% 45.0
Low Forecast -0.9% 4.0% 30.0
Number of Participants 71 32 66
Previous -0.3% 4.2% 38.0
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4CAST Ltd. -0.4% 4.1% 37.5
Action Economics -0.6% 4.2% 40.0
Aletti Gestielle SGR -0.4% 4.2% 38.0
Allianz Dresdner Economic -0.4% --- ---
Ameriprise Financial Inc -0.5% 4.1% 38.0
Argus Research Corp. -0.1% 4.2% 40.0
Banc of America Securitie -0.5% 4.2% 36.0
Bank of Tokyo- Mitsubishi -0.4% --- 36.5
Bantleon Bank AG -0.5% --- 40.0
Barclays Capital -0.5% 4.2% 35.0
BMO Capital Markets -0.5% --- 37.0
BNP Paribas -0.5% --- 41.0
Briefing.com -0.3% 4.2% 40.0
Calyon -0.4% 4.2% 38.0
CIBC World Markets -0.6% --- 36.0
Citi -0.6% 4.1% 38.0
ClearView Economics -0.6% 4.0% ---
Commerzbank AG -0.8% --- 40.0
Credit Suisse -0.5% 4.2% 35.0
Daiwa Securities America -0.5% 4.2% 38.0
Danske Bank -0.6% --- 40.0
DekaBank -0.5% 4.2% ---
Desjardins Group -0.3% 4.2% 38.2
Deutsche Bank Securities -0.6% 4.2% 35.0
Deutsche Postbank AG -0.5% --- 38.0
Dresdner Kleinwort -0.5% --- 40.0
DZ Bank -0.5% 4.2% 37.0
First Trust Advisors -0.5% 4.2% 37.5
Fortis -0.5% --- 39.5
Helaba -0.6% --- 40.0
Herrmann Forecasting -0.5% --- 38.0
High Frequency Economics -0.5% --- 40.0
Horizon Investments -0.7% --- 35.0
HSBC Markets -0.5% --- 40.0
IDEAglobal -0.8% 4.2% 36.0
IHS Global Insight -0.4% --- 37.0
Informa Global Markets -0.5% 4.1% 39.5
ING Financial Markets -0.3% --- 37.0
Insight Economics -0.8% 4.2% 36.0
Intesa-SanPaulo -0.4% --- 39.0
J.P. Morgan Chase -0.7% --- 37.0
Janney Montgomery Scott L -0.6% --- 36.5
JPMorgan’s Private Wealth -0.6% 4.2% 38.5
Landesbank Berlin -0.6% --- 40.0
Landesbank BW -0.5% --- 36.0
Maria Fiorini Ramirez Inc -0.5% 4.2% ---
Merrill Lynch -0.5% 4.2% 35.6
Moody’s Economy.com -0.7% --- 37.0
Morgan Stanley & Co. -0.7% --- 43.0
National Bank Financial --- --- 37.0
National City Corporation -0.5% 4.0% 37.7
Natixis -0.5% --- 37.0
Newedge -0.5% --- 41.0
Nomura Securities Intl. -0.4% 4.2% ---
PNC Bank -0.9% 4.0% ---
RBC Capital Markets -0.5% --- ---
RBS Greenwich Capital -0.5% 4.2% 36.0
Ried, Thunberg & Co. -0.6% --- 40.0
Schneider Trading Associa -0.6% --- 38.5
Scotia Capital -0.3% --- 36.0
Societe Generale -0.5% 4.2% 40.0
Standard Chartered -0.3% --- 38.0
Stone & McCarthy Research -0.5% 4.2% 38.5
TD Securities --- --- 35.0
Thomson Financial/IFR -0.5% --- 37.0
UBS Securities LLC -0.5% --- 36.0
Unicredit MIB -0.5% --- 38.0
University of Maryland -0.5% 4.2% 45.0
Wachovia Corp. -0.6% --- 30.0
Wells Fargo & Co. -0.6% 4.2% 39.0
WestLB AG -0.5% --- 38.5
Westpac Banking Co. -0.5% --- 36.0
Wrightson Associates -0.6% --- 40.0
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To contact the reporters on this story: Bob Willis in Washington at bwillis@bloomberg.net
