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Consumer confidence fell to an all-time low in October, plunging 23.4 points from the previous month.
The Conference Board’s Consumer Confidence Index stood at 38.0 (1985=100) in October, down from September’s 61.4.
Lynn Franco, director of the Conference Board’s Consumer Research Bureau, said, “The impact of the financial crisis over the last several weeks has clearly taken a toll on consumers’ confidence. The decline in the Index (23.4 points) is the third largest in history and the lowest reading on record.”
The Conference Board report supports National Retail Federation (NRF) president Tracy Mullin’s appeal to Congress for another stimulus package and tax relief for consumers. Mullin said, “Consumer confidence has been badly eroded by the floundering economy and instability of the financial markets.
“Because consumer spending represents two-thirds of GDP and supports tens of millions of jobs, it is difficult if not impossible to foresee an improvement in overall economic growth until consumer confidence and spending return.”
In mid-October the NRF called on Congress to hold a lame-duck session to address the nation’s economy as soon as possible after the November elections and to include tax relief for consumers in any economic stimulus package that is adopted.
Mullin contends, “Extraordinary measures are needed to address this profound economic emergency that has affected every American. There is hard evidence that the first round of economic stimulus checks were used for good purposes: to pay down debt, to help fund ordinary household expenses and to purchases necessities. But we believe a second round of economic stimulus is needed and must include relief for the consumer. Increased consumer spending would create demand throughout all aspects of the nation’s economy, from manufacturing to transportation to construction.”