For Economy, Holidays Fall Short On Hope

By: CBS/AP
By: CBS/AP

(CBS/AP) At least one gift was sorely lacking during the holiday season - optimism about the economy.

Consumer confidence hit an all-time low in December, dropping unexpectedly in the face of layoffs and deteriorating markets for housing, stocks and other investments.

The Conference Board's Consumer Confidence Index fell to 38 in December from a revised 44.7 in November. Economists surveyed by Thomson Reuters had expected the index to rise incrementally to 45.

The separate Present Situation index, which measures how respondents feel about business conditions and employment prospects, fell to 29.4 in December from 42.3 in November. It is now close to levels last seen after the 1990 to 1991 recession.

The dismal job market appears to have outweighed declining gas prices in consumers' minds. Those saying jobs are "hard to get" rose to 42 percent in December from 37.1 percent in November, while those claiming jobs are "plentiful" decreased to 6.2 percent from 8.7 percent.

The proportion of consumers anticipating an increase in their incomes decreased to 12.7 percent in December from 13.1 percent in November.

Those claiming business conditions are "bad" increased to 46.0 percent in December from 40.6 percent in November, while those saying business conditions are "good" declined to 7.7 percent from 10.1 percent.

The survey is based on a representative sample of 5,000 U.S. households. The cutoff date for December's preliminary results was Dec. 22.

Meanwhile, a report shows October housing prices fell at a record rate from the same month last year.

The Standard & Poor's/Case-Shiller 20-city housing index released Tuesday fell by a record 18 percent from October last year, the largest drop since its inception in 2000. The 10-city index tumbled 19.1 percent, its biggest decline in its 21-year history.

Both indices have recorded year-over-year declines for 22 straight months. Prices are at levels not seen since March 2004.

Prices in the 20-city index have plummeted more than 23.4 percent from their peak in July 2006. The 10-city index has fallen 25 percent since its peak in June 2006.

None of the 20 cities saw annual price gains in October - for the seventh consecutive month.

© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.


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