Consumer confidence plunges

According to a recent Gallup poll, consumer confidence has taken its sharpest one-week plunge since the collapse of Lehman Brothers. Consumers have little hope that the economy will make any significant improvements any time soon, and 69% say that it will get worse before it gets better. Only 27% of people say the economy is moving toward improvement, and the gap between those numbers is more than twice as large as it was right before the government shutdown.

Frank Newport, editor in chief of Gallup said: “In theory it can get a lot worse. I hope it doesn’t.” Experts also say that the short-term resolution to raise the debt ceiling may only prolong consumers’ uncertainty. Economists believe that spending will continue to decrease as gridlock in congress causes financial concern among citizens.

“We think we’ll see a hit to anything that’s discretionary,” said Lacey Plache, chief economist for Edmunds.com “Probably most sectors will see some sort of softening.”

With the holiday shopping season approaching, retailers are even more concerned that congress will drag out the gridlock too long.