Consumer sentiment falls to record low as economy worsens

Written by Writer on Thursday, November 13th, 2008

Consumer sentiment falls to record low as economy worsens

Bloomberg

Consumer confidence fell to its lowest level in at least 26 years, making it unlikely shoppers will spend to support an economy weakened by slower global demand and falling stock prices, the Cabinet Office said Wednesday.

The confidence index dropped to 29.4 last month from 31.4 in September, the Cabinet Office said. It’s the lowest since the government began compiling figures in 1982.

Prime Minister Taro Aso last month promised to give ¥2 trillion to households to alleviate pain from the economic slump. Tumbling stocks and falling profits are adding to consumer anxiety about paychecks and jobs, making it harder for them to support the world’s second-largest economy.

“What you hear is bad news. No wonder consumers are pessimistic,” said Noriaki Matsuoka, an economist at Daiwa Asset Management Co.

“Households aren’t going to spend money with growing concerns, especially for employment and wages,” he said.

Personal spending dropped for a seventh month in September as the number of jobs available to each applicant slid to a four-year low and wages grew just 0.1 percent.

“The economy is becoming more sluggish,” Bank of Japan Deputy Gov. Hirohide Yamaguchi said Tuesday in the Diet.

“We need to pay close attention to downside risks for the economy, given conditions in overseas economies and global financial markets.”

The BOJ lowered its key overnight lending rate to 0.3 percent last month after the Nikkei 225 stock average fell to the lowest level in 26 years and the yen surged to a 13-year high against the dollar.

The Japan Times
Thursday, Nov. 13, 2008