U.S. consumer confidence slumps in December

The U.S. Conference Board said American consumer confidence fell to a record low in December, an indication that the holiday season could be bleak for retailers.

The business think-tank, which publishes the monthly indicator, said December's dip reversed November's modest uptick in sentiment and showed the flagging economy throughout the fall has turned buyer sentiment distinctly negative.

"The further erosion of the [index] reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008," said Lynn Franco, director of the Conference Board's consumer research centre.

The Conference Board's index stood at 38 in December, a drop of 15 per cent versus November's reading of 44.7. For the index, the year 1985 equals 100 per cent. That means the current level of consumer confidence is 38 per cent of the reading taken 23 years earlier.

Disappearing hope

American retailers had been crossing their fingers in the hope that the gloom pervading the economy would not infect their customers in the last month of the year.

The Conference Board's reading indicates that any hope of a decent Yuletide selling season might be fading.

The "present situation" portion of the survey fell precipitously in December, tumbling to 29.4 from November's 42.3.

As well, those consumers who viewed business conditions as "bad" rose to 46 per cent in the last month of the year, up from 40.6 per cent one month earlier.

Retailers had been experiencing slowing sales in the months leading up to Christmas.

Wal-Mart Stores Inc., for instance, saw its November sales rise by 1.6 per cent in November. That rate compares with sales growth of 8.3 per cent for the preceding 39 weeks in 2008.