WP: Consumer confidence at 10 year low

[Red Panda]

http://www.washingtonpost.com/wp-dyn/articles/A64508-2003Feb25.html

Consumer Confidence Spirals Downward
 
 
By Rebecca Gomez
The Associated Press
Tuesday, February 25, 2003; 11:39 AM


Consumers have grown extremely wary as the United States inches closer to war with Iraq, driving down their confidence in the economy to its lowest level in nearly a decade, a private research group said Tuesday.

The Consumer Confidence Index plummeted to 64.0 in February from a revised 78.8 in January - a drop of nearly 15 points, the Conference Board said. That is the lowest reading since the index hit 60.5 in October 1993.

The latest index reading is far below analysts' expectations of 77.0 for February.

"Lackluster job and financial markets, rising fuel costs, and the increasing threat of war and terrorism appear to have taken a toll on consumers," said Lynn Franco, director of the Conference Board's Consumer Research Center.

 

[Aurelius]

I believe that the US economy will rebound. It always has, and usually quicker than the other major ecomomies.

Panda, what is the potential effect of a large trade deficit on the US economy? Is this good or bad for you guys; or does the answer to that question depend largely on which industry you're in?

 

[Red Panda]

A *trade* deficit? Not much. Trade deficits (as measured by the value of goods and services imported vs. exported) is also impacted by the strength of the dollar against other major currencies.

Now a budget deficit - that's different. That causes govt borrowing, which raises the cost of credit to you and me. And it also means that a growing percentage of the federal budget has to be devoted to paying down the debt.

Republicans used to be against deficits. Until recently, that is.