Consumer Economy

Wednesday, December 29, 2010 - 9:38am

Consumer confidence took an unexpected dip in December and it's not the only discouraging indicator out this season.

Americans seemed to be on a holiday spending spree but the latest consumer confidence numbers tell a different story. It seems consumers are still worried about the economy and spending accordingly.

The latest housing prices numbers are just as disappointing and show once again that the U.S. economy is facing some tough headwinds.

After U.S. retailers racked up their best holiday season in years, many analysts expected this month's consumer confidence numbers to go up but they dipped.

Worries about the sluggish recovery are weighing down the economy.

Peter Morici an economist with the University of Maryland said “confidence is important, it encourages people to spend, it encourages people to buy homes, and frankly businesses use that as a signal as to whether to hire."

Oil prices are rising again, up 15% compared to last year. Big city home prices fell eight-tenths of a percent from October 2009 to October 2010, raising fears of a double-dip housing downturn.

David Blitzer of Standard & Poor's said "looking at six cities making new lows including a couple like Seattle, Washington, Portland, Oregon... its getting very hard to argue there won't be a double dip."

The real estate industry says some markets are rebounding.

David Bishop of the National Association of Realtors said "things are better than they were, and likely to continue to improve over the next few months. All of it's really contingent on what going on in the economy and what they unemployment rate looks like as we get into the New Year."

Unemployment is just under 10%.

And so many americans have been jobless for so long, the government is about to change the way it counts the long-term unemployed, tracking them for five years, instead of the current two.

15 million Americans are jobless and nearly 10% have been out of work for two years or more.
 

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