Consumer Payment Card News

Recession Anyone?

Economic barometers are pointing towards a recession next year in the wake of high gasoline prices, low housing prices, a crumbling dollar, plummeting consumer confidence, mixed holiday sales, reduced credit availability, rising bankruptcies, surging foreclosures and weak employment. The “Credit Manager’s Index” fell for the third consecutive month in November as all four components of the “Index” declined for the first time in five years, indicating a contraction. The seasonally adjusted composite “CMI” declined to 53.1 in November, compared to 53.8 in the prior month and 55.2 for November 2006. The National Association of Credit Management says the Fed will likely cut rates again this month and will continue to cut the Fed Funds rate well into 2008, perhaps as low as 3.5%. Last week, the “Conference Board Consumer Confidence Index” dropped to 87.3 in November from 95.2 in October. The latest “Business and Industry Economic Outlook Survey” of the American Institute of Certified Public Accountants found that optimism about the economy among executive CPAs plunged in the fourth quarter to its lowest level in three years. U.S. consumer confidence hit its lowest level in more than two years. The “RBC CASH Index” hit its lowest level in more than two years during November, down more than 16 points from October’s 80.6 level. The “Discover Small Business Watch” index found that economic confidence among small business owners declined in November for the fourth consecutive month, falling to its lowest point this year.

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