Consumer confidence declined last week as Americans’ views of the economy sank to the lowest since the recession, highlighting the challenges facing the recovery.
The Bloomberg Consumer Comfort Index fell to minus 51.1 in the week ended Oct. 23, the lowest in a month, from minus 48.4 the prior period. Ninety-five percent of those surveyed had a negative opinion about the economy, the worst since April 2009 and one percentage point shy of a record high.
Morass in the housing market, slow hiring and limited wage growth that have soured attitudes may contain consumer spending after a third-quarter pickup. The Obama administration and some Federal Reserve officials said shoring up residential real estate would help speed the recovery.
“Consumer sentiment remains mired knee-deep in the big muddy of an epic housing mess, household deleveraging and a broken labor market,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “The specter of a European debt crisis and the likelihood of no additional policy support here at home will probably keep sentiment at or near historically low levels.”
The U.S. economy grew in the third quarter at the fastest pace in a year as gains in consumer spending and business investment helped support a recovery on the brink of faltering. Gross domestic product rose at a 2.5 percent annual rate, matching the median forecast of economists surveyed by Bloomberg News and up from a 1.3 percent gain in the prior quarter, according to Commerce Department figures. Household purchases, the biggest part of the economy, increased at a more-than- projected 2.4 percent pace.