Consumer confidence plunged to two-year lows in August, stoking predictions and outright declarations that the economy has slipped into recession.
The Conference Board announced Tuesday that its Consumer Confidence Index fell a steep 14.7 points to a low not seen since April 2009, when the United States was still officially in recession. The Conference Board’s Lynn Franco says a factor contributing to the sharp fall-off “may have been the debt ceiling discussions since the decline in confidence was well underway before the S&P downgrade.” She added that “employment conditions continue to suppress confidence.”
Meanwhile, a similar index shows a parallel drop in consumer confidence in Florida, prompting the survey’s director to declare his state to be “in, or at least very near, a recession.”
And Wells Fargo economists have declared 12 states to be contracting, with one of them, Alabama, already in a recession. The other declining states named by Wells Fargo were Georgia, South Carolina, North Carolina, Virginia, Michigan, Nevada, Montana, Illinois, Indiana, Vermont and Alaska.
PIMCO bond manager Bill Gross is another prominent voice that sees recession at hand, telling The Financial Times on Monday that “the U.S. and developed economies are near the recessionary dividing point.”