US consumer confidence plunges to all-time low

US consumer confidence plunged to a historic low in December amid a deepening recession, and the outlook for the next six months is "quite dismal," the Conference Board said Tuesday.
The private research firm, which has been measuring consumer confidence since 1967, said the index tumbled to 38.0 in December from 44.7 in November due to the deteriorating economic conditions in the fourth quarter.
Consumers' outlook for the first half of 2009 remains "quite dismal," and they see "only a modest recovery" in the second half of the year, said Lynn Franco, research director at the Conference Board.
The 38.0 index reading eclipsed the previous record low of 38.8 in October, and was weaker than the 45.5 reading which had been forecast by analysts.
"The further erosion of the consumer confidence index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008," Franco said.
The quarter was marked by an escalating global financial crisis, and massive government efforts to bail out banks and unblock frozen credit, rising unemployment and plunging home values.
On December 1, the world's biggest economy officially was declared to have been in recession since December 2007.
The sharp decline in the consumer confidence index "emphasizes the urgency of decisive policy action to shore up the economy," said Brian Bethune, an economist at IHS Global Insight.
Bethune noted that president-elect Barack Obama was expected to step up the government's unprecedented offensive against the financial turmoil when he takes office on January 20.
"We expect the gamut of policy action to expand considerably further, with a large 700 to 800 billion dollar fiscal stimulus package from the incoming Obama administration in early 2009," he said.
The Conference Board report, based on a survey of 5,000 US households through December 22, showed consumers' confidence in the current business conditions had fallen off a cliff.