U.S. consumer confidence fell to a record low in January as a downtrodden housing sector and worsening job prospects kept the country in a somber mood, according to a Reuters report.
The Conference Board, an industry group, said its sentiment index fell to 37.7 from a revised 38.6 in December, confounding forecasts for a small uptick.
“Consumers remain quite pessimistic about the state of the economy,” said Lynn Franco, director of The Conference Board Research Center. “Until we begin to see considerable improvements in the expectations index, we can’t say the worst of times are behind us.”
In January, the expectations index dropped to 43.0 from 44.2 the previous month.
Yet despite the worst year for the labor market in more than a half century, Americans were remaining cautiously optimistic about their prospects.
The number of respondents saying jobs were hard to get edged down slightly, although the proportion of consumers expecting their incomes to rise declined to 10 percent from 12.7%.
At the center of the country’s economic crisis was a housing sector that showed few signs of improvement. In a separate report on Tuesday, S&P/Case Shiller said home prices fell 18.2% in the year to November, a record drop.
Home values have deteriorated by as much as a quarter from their 2006 peaks, a development largely deemed impossible by most mainstream economists at the height of the bubble.
Cheaper gasoline has been one of the few benefits of the downturn but has thus far failed to significantly boost consumption as consumers adjust from many years of heavy reliance on debt to fuel their spending.
Only 13.3% of consumers expect business conditions to get better within the next six months, The Conference Board said.