Complain about a product or service

Feds Report More Signs of Recession

Government statistics show bad tidings in October

By Mark Huffman
ConsumerAffairs.com

November 26, 2008

Personal Finance • Staying Healthy in a Sick Economy • Consumer Confidence Sinks to Historic Low • How Retirees Can Survive the Bear Market • Are Men Hardwired to Overspend? • Shopping Poll Holds Bad News for Retailers • 533,000 Jobs Lost in November • Feds Report More Signs of Recession • Consumer Confidence Rebounds in November • Cheap Oil May Be Economic Stimulus • Job Security Lacking This Holiday Season • An Upside to the Down Market: A Lower Tax Bill • Americans Tap Savings to Cope with Economy • Economists' Panel Sees Prolonged Recession --- • More Personal Finance News

We know October was a bad month for the economy. Government statistics released Wednesday show just how bad.

The U.S. Commerce Department reports consumer spending fell by a full percentage point last month, the largest one-month drop since the September 11, 2001 terror attacks. It was the fourth straight month that consumers have spent less.

Not only did the financial meltdown and fears of rising job losses make consumers more reluctant to buy things, many of them found they couldn't buy them if they wanted to. The credit crunch made it harder for homeowners to get home equity credit lines and other consumers found credit card companies less willing to increase credit limits.

Because fewer consumers were less willing and able to spend, orders for durable goods also took a big drop during the month. These orders for big-ticket items like cars and computers plunged 6.2 percent. Even economists braced for bad news on this front were caught off guard.

Not surprisingly, some indicators of consumer confidence remain in the dumps. The Reuters/University of Michigan Surveys of Consumers said its final index reading of November's confidence level fell to 55.3 from October's 57.6, the lowest since 1980.

All of this added together suggests we're likely in the beginning phase of a recession, economists say. The government's revised estimate of third quarter Gross Domestic Product worsened, showing the economy contracted at a rate of 0.5 percent. Two back to back quarters of negative growth is the official definition of a recession.

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Back to the top |