American consumers, battered by falling home prices and soaring gasoline prices, are at their gloomiest in decades, raising fears they might cut back on spending later this year and tip the economy into a recession.
Consumer confidence plunged in June to its lowest level since 1992, and home-price declines accelerated in April, according to data released Tuesday. The renewed signs of economic weakness increased the likelihood that Federal Reserve policy makers, who wrap up a two-day meeting Wednesday, will hold the target for their benchmark interest rates steady at 2%.
The Conference Board, a New York-based business research group, said consumer confidence dropped to 50.4 in June from 58.1 last month. The scale — which uses as its benchmark a 1985 level of 100 — peaked most recently at 111.9 in July 2007. Consumers’ expectations of the economy six months ahead plunged to the lowest levels since the board began conducting its surveys in 1967.
Well if you have less money it’s going to happen. I know that we are cutting back on spending.