Industry News

Consumer confidence caves under housing slump

Survey: Confidence in overall economy shaken

Consumer confidence fell in October, mainly due to falling home prices as consumers expressed growing concerns over the housing slump, which has shaken confidence in the overall economy. An index of consumer sentiment fell to 80.9 in October, down from 83.4 in the August and September surveys and well below the 93.6 recording in October 2006, according to the University of Michigan's latest survey of consumers. The overall level of confidence is still well above the point that signals an impending recession, according to Richard Curtin, director of the surveys produced jointly by Reuters and the university. "Each downward step in confidence increases the probability of recession, which is still below 50 percent, but not comfortably so," Curtin said. Falling home prices as well as higher food and fuel prices will make consumers much more cautious spenders. Overall, the pace of growth in real personal consumption is expected to slow to 2 percent over the next four quart...