Consumer Confidence at the Lowest Level

The Conference Board's Consumer Confidence Index fell to an all-time low of 38 in December from a revised 44.7 in November. The record drop reflects the worsening U.S. economy, raising unemployment, deteriorating housing market, falling stock markets, and uncertain outlook for the New Year.

The gloomy job market and falling asset prices appear to have outweighed declining consumer prices in consumers' minds. Layoffs and income cuts were widespread this year. The unemployment rate has crept up to 6.7 percent in November, the highest jobless rate in the past 15 year. The number of Americans filing for first-time unemployment benefits rose to a 26-year high for the week ended Dec. 20.

The dismal news came at the end of a full year of recession. During the year the credit crunch has strained the financial system as central banks struggle to raise capital. Meanwhile, S&P 500 index has plummeted more than 40 percent and housing prices have plunged 18 percent on year to year basis in October.