Recession on the Way?

September 27, 2005

A story chronicling the sorry state of consumer confidence Tuesday contained the one word Americans never want to read or hear: recession.

We learned that consumer confidence was hit with its greatest plunge in 15 years this month. The Consumer Confidence Index fell 18.9 points to 86.6 from a revised level of 105.5 in August. This represented the largest drop since October 1990 when the number declined 23 points to 62.6 "in the wake of the recession."

The September level was the lowest since October 2003 when it came in at 81.7.

Consumer spending during the remainder of the year, including the all-important holiday shopping season, is in jeopardy following the double dose of disaster provided by hurricanes Katrina and Rita and gas prices hovering around $3 per gallon.

Adding to the misery was the government's report that new home sales fell in August by the greatest total in nine months.

By Glenn J. Kalinoski, Executive Editor, Customer Inter@ction Solutions