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updated 12/28/2010 10:48:32 AM ET 2010-12-28T15:48:32
BREAKING NEWS

A new survey shows consumer confidence in the U.S. dipped in December, even after other reports suggest people increased their holiday spending at the biggest rate in four years.

The Conference Board, a private research group, says its Consumer Confidence Index fell to 52.5, down from a revised 54.3 in November. Economists were expecting 55.8. It takes a reading of 90 to indicate a healthy economy, a level not approached since the recession began in 2007.

Economists watch confidence closely because consumer spending accounts for about 70 percent of U.S. economic activity.

The index is based on a survey of 5,000 consumers with a cutoff date of Dec. 20.

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Video: Consumer confidence dips in December

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    >>> now, speaking of digging out. let's dig deeper into the new consumer confidence numbers. a private research survey that shows consumer confidence dipping in december amid some job worries. we just got that in. some of the estimates would be up. now, we care about consumer confidence because it leads to consumer spending . when we care about that because it is 70% of the economy. we're now joined by " wall street journal " senior economic writer steve moore . i was getting this wire in as we were hearing from bill, we're understanding that consumer confidence has dipped in december. were you thinking it was actually going to go up?

    >> i sure was, richard . just go in the shopping malls in the last month or so and you saw people walking around with their credit card and the stores were full and as you reported earlier retail sales were up substantially. so, i'm very shocked w ed by this number. the one thing i would say, richard , i view consumer confidence numbers as a lagging indicator not a leading indicator . i'm still really bullish on the next six month or so. i think we'll see powerful recovery coming with perhaps 4% growth and i think we're going to see, you know, the job numbers come out next week and those look like they're fairly strong.

    >> lagging meaning it is lagging behind in the rear view mirror instead of out the front windshield. down slightly from 52.5% to 54.3. what do we need in terms of consumer confidence to show that we're getting back to that place where we'll have more jobs?

    >> what's more important than how people respond to these surveys, how people are actually spending and what they're actually doing with their money and that's where we see some positive results. richard , one thing you said a couple minutes ago, that was some of the new numbers you reported about housing because i'm a big believer that we're not going to fully get out of this terrible and lengthy recession until we see a turn around in the housing market . the housing collapse is what got us into this crisis in the first place. i was really quite disturbed by some of those numbers that reported that prices are still dipping a little bit. that suggests to me, richard , we haven't hit bottom.

    >> those were the two keys legs that we were waiting for. we talk about the housing market and jobs. housing how does that relate to jobs and what we're seeing right now?

    >> the two are just intertwined because it's self-evident if somebody doesn't have a job or a full-time job, it becomes very difficult for them to pay their morgue mortgage. if they can't pay their mortgage, they foreclose. you can see there is this cycle and what we have to do is get out of this vicious cycle and hopefully as we see job growth next year people will start to be able to afford houses. they will be able to afford paying their mortgages and a decline in foreclosures. that's what i have my fingers crossed hoping that will happen some time in the next few month.

    >> we did that this morning. based on the estimate that the consumer confidence number would go up showing perhaps we will see more jobs go up in 2011 . hopefully more positive news in the new year. stee steve moore , thank you so much.

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