More bad news for US economy
Consumer confidence and house prices slump in latest signs of looming US recession.
Financial experts have blamed tight credit conditions, falling housing wealth, rising gasoline prices and the nation’s increasing unemployment rate for the confidence slump.
Bleak outlook
Meanwhile housing prices in all 20 US cities tracked by the Standard & Poor’s/Case-Shiller home price index showed annual declines at levels not seen since August 2004.
The index’s smaller 10-city index fell 16.3 per cent in April, the largest decline in its two-decade history.
“Looking ahead, consumers’ economic outlook is so bleak that the expectations index has reached a new all-time low,” Lynn Franco, consumer research director at the Conference Board, told AFP.
“Perhaps the silver lining to this otherwise dismal report is that consumer
confidence may be nearing a bottom.”
The reports coincided with the opening of a two-day meeting held by the US central bank, the Federal Reserve, to discuss interest rates, which are expected to be left unchanged in a decision to be released on Wednesday.
The US Federal Reserve has cut interest rates by 3.25 percentage points since last September in a bid to stave off the nation’s growing housing and credit crises.