And the bad news keeps on coming . . .
Now US confidence plummets.
The dangers of the world economy slowing are increasing by the minute.
In the hour or so since I wrote this, the data from the Conference Board was published on consumer confidence in the United States. The index, which had improved slightly in July, plummeted in August. The index now stands at 44.5 (1985=100), down from 59.2 in July, which is its largest fall since the 23-point decline in October 2008, when the collapse of Lehman Brothers sent reverberations around the world.
The drop was well below the consensus forecast among economists who were polled, of 52.0. The Present Situation Index decreased to 33.3 from 35.7. The Expectations Index collapsed, falling to 51.9 from 74.9 last month. This is consistent with the Reuters/University of Michigan Consumer Confidence Index, which dropped this month to the lowest level since November 2008.
Says Lynn Franco, director of the Conference Board Consumer Research Centre:
Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook. The index is now at its lowest level in more than two years (April 2009, 40.8). A contributing factor may have been the debt ceiling discussions since the decline in confidence was well underway before the S&P downgrade. Consumers' assessment of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence.
Chris Williamson, chief economist at Markit has it right:
The survey data highlight how the increasingly downbeat news flow on both sides of the Atlantic in terms of stalling economic recoveries, debt worries and the lack of clarity on any course of remedial action from policymakers is causing consumers to retrench further. This is bad news not just for the US and Eurozone, but for the global economic recovery as a whole, as rising consumer spending in the developed world has an important role to play in driving worldwide economic growth. Expect to see growth forecasts revised down in the light of these new numbers.
Bad news on top of bad. I am still waiting for a response from George "Slasher" Osborne.