Consumer Confidence Hits 28-Year Low

Ann Arbor, MI, May 16, 2008--Consumer confidence fell to its lowest level in 28 years this month, according to the Reuters/University of Michigan Surveys of Consumers.

Short-term inflation expectations hit their highest since the stagflationary early 1980s.

The survey said its index of confidence fell to 59.5 in May, its lowest since June 1980. In April it was 62.6.

"Consumer confidence continued to slip in early May due to surging food and fuel prices," the survey statement said.

"Record numbers of consumers viewed the economy in recession and saw little hope of recovery anytime soon."

This was well below economists' median expectation of a reading of 62.0.

One-year inflation expectations surged to 5.2 percent -- their highest since February 1982 -- from 4.8 percent in April.

The  survey also said tconsumption growth is likely to be 1 percent in 2008, with the pace weakening in late 2008 and early 2009.