NEW YORK -- As the holiday retailing season begins, the mood of the nation's shoppers has fallen to the lowest level since the dog days of the 1980 recession.
Consumer confidence, an important indicator of business conditions, has eroded badly this month, according to a survey released yesterday by the Conference Board, a New York-based business research group. The drop extended a slide that began this summer, as euphoria from the Persian Gulf war dissipated.
And that's a disturbing sign for retailers and manufacturers who already have suffered through two difficult years.
"The confidence Grinch is likely to steal Christmas," concluded Anthony Vignola Jr., chief economist at Kidder Peabody & Co.
How bad was it? Survey results are tabulated on an index, with a score of 100 or more considered good, and below 80 considered worrisome.
November's score: 50.6.
Consumers are pessimistic even though other key economic indicators, including inflation and employment, have remained far healthier than during previous recessions.
The reason: Americans are increasingly worried that job security is tenuous and wage gains unlikely, a number of economists said. Moreover, for the first time since World War II, many people have seen the worth of their most significant asset, their home, decline.
Yesterday's survey results drew a mixed reaction.
"Erosion like this can only bode ill for demand," said Howard Keen, chief economist for the Consolidated Rail Corp. "We are in a tenuous situation. There is nothing out there to propel the economy."
He added, though, that such pervasive pessimism often comes at the absolute bottom of a recession.
Richard Peterson, chief economist of Continental Bank, noted that business confidence would improve along with conditions -- and thefirst tentative signs already are emerging in the form of increased exports and capital investment.
On Wall Street, stock prices, which had risen at yesterday's opening, tumbled immediately after the survey results were announced. The market later recovered, and the Dow Jones industrial average finished the session at 2,916.14, up 14.08.
The Conference Board poll is widely viewed as a leading indicator of business conditions.
A change in consumer confidence preceded both the recession and the recovery a decade ago. The poll's index peaked in 1989 and began a protracted decline in early 1990, shortly before the July beginning of the most recent recession.
The gauge registered particularly significant drops in late 1990 and early this year, only to rebound at the end of the Persian Gulf war. It did not, however, return to the lofty levels sustained throughout the mid-1980s. In July, for example, the index stood at 77.7; by October it had dropped to 60.1.