“Really at this point we are not going to be seeing anything fundamentally positive from the U.S. for the time being,” Michael Woolfolk, senior currency strategist at the Bank of New York Mellon in New York, told Reuters.
U.S. consumer confidence fell to a record low in December as the slumping job market continued to take a toll on feelings toward the economy, the Conference Board business research company said. The group said its Consumer Confidence Index fell to 38.0 in December from a slightly downwardly revised 44.7 in November.
In the Conference Board survey, those saying jobs are “hard to get” rose to 42 percent in December from 37.1 percent in November, while those claiming jobs are “plentiful” decreased to 6.2 percent from 8.7 percent.
The unemployment rate hit a 15-year high of 6.7 percent in November and economists are expecting more job losses in the first half of 2009.
The continued weakness in consumer confidence “reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008,” Lynn Franco, director of the Conference Board Consumer Research Center, told the Washington Post.
Bloomberg News reported that U.S. retailers’ sales declined during the week of the Christmas holiday the most in almost six years as steep markdowns failed to save what may be the worst holiday shopping season in four decades.
“Fourth-quarter earnings for retailers will tank,” Richard Hastings, a consumer strategist at Global Hunter Securities LLC of Newport Beach, Calif., told Bloomberg in a telephone interview. “I don’t think we return to normal next year.”
Meanwhile, prices of U.S. single-family homes in October posted a record fall of 18.0 percent from a year earlier, according to the Standard & Poor’s/Case-Shiller Home Price Indices.
Prices in the 20-city index have dropped more than 23.4 percent from their peak in July 2006. The 10-city index has fallen 25 percent since its peak in June 2006. Overall, prices are at levels not seen since March 2004.
“October was clearly the free-fall month,” David Blitzer, chairman of the index committee at Standard & Poor’s, told the New York Times of the numbers. “Everything was going against us in October, without exception.”
Three of the 20 metro areas included in the survey saw prices drop more than 30 percent. Phoenix home values lost almost 33 percent, while Las Vegas prices fell nearly 32 percent. San Francisco prices tumbled 31 percent year-over-year in October.
Miami, Los Angeles, and San Diego were close behind with annual declines of 29.0 percent, 27.9 percent and 26.7 percent, respectively, the report found.
None of the cities surveyed saw annual price gains in October and 14 of them posted record year-over-year declines.
“The numbers are getting worse. And I think they will get quite a bit worse over the next two months because housing demand has plunged since the market went into turmoil,” Patrick Newport, an economist at IHS Global Insight, told the Associated Press.
Last week, the government reported that sales of new homes fell in November to the slowest pace in almost 18 years, while new home prices dropped 11.5 percent to $220,400, the largest decline in eight months.
On Wednesday, Freddie Mac is set to release its weekly survey of mortgage rates, and the Mortgage Bankers Association will release its weekly survey of mortgage applications.