Consumer confidence at 9-year low

Here's the article many of you are discussing in the comments: The Consumer Confidence Index has fallen for the 5th straight month, and is now at a 9-year low.

Stocks sank in early morning trade on Tuesday after a report showed consumer confidence in October fell to its lowest level in nine years, fanning fears over the fate of the economic recovery.

"It spooks the market, because it suggests confidence is actually weaker than we thought and that's it's getting harder and harder to make the case consumer spending will hold together," said Hugh Johnson, chief investment officer at First Albany Corp. "This is not a good number."

Consumer spending has single-handedly propped up this economy. In previous recessions, consumer spending led the economy back to health. This time around, consumer spending has remained high (thanks to historically low interest rates), making recovery a much more difficult proposition. If consumer spending slows, it would be catastrophic to the economy.

Which reminds me of a James Carville quote this weekend on one of those Sunday morning shows (and this is a paraphrase):

If you think all the economy needs is terrorism insurance, then vote Republican.

Posted October 29, 2002 09:15 AM | Comments (6)