Consumer Confidence Plummets

By Nick Porcell

On Tuesday, Federal Reserve Chairman, Ben Bernanke testified in front of Congress, about the state of the United States economy, and it was not good news. Ben Bernanke stated that there is considerable uncertainty. he believes that the economy will start to show signs of life by 2010, however, the United States will not fully recover for another two to three years.

On Tuesday, the consumer confidence numbers also came out, and they were not good. The Consumer Confidence Index that had dropped slightly in January, dropped twelve points in February to a record low of twenty-five. Economists predicted a slight decrease in the numbers just like in January, and expected a one and a half point drop to thirty-five and a half. In the other indexes, the Present Situation Index and Expectation Index both fell. In January the Present Situation Index fell from twenty-nine to twenty-one and the Expectation Index fell from forty-two and a half to twenty-seven and a half, a massive drop in both indexes.

This comes as little surprise. With President Obama signing the stimulus package this week and the huge amount of government spending that the bill entails, on top of the Federal Reserves' near zero percent interest rate, many people are worried about inflation. On top of the lack of exports and increased employment, people have a reason to be pessimistic.

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