Devoted to Managers and those that seek to improve their management skills

The seven point drop in consumer confidence to 105.0, is the worse drop since Katrina hit New Orleans.

With the United States consumers accounting for about two-thirds of spending in the economy, it looks like economic growth may be stale for some time to come.

"My guess is we're heading for a consumer-led recession beginning in a few quarters," said Michael Metz, chief investment strategist at Oppenheimer & Co. "The consumption boom is over."
 
The majority of this is connected to the subprime crisis which impacted more companies than was originally estimated. That, along with consumers changing the way they interacted with their homes, by using them for personal banks rather than primarily a place to live has created the confidence meltdown.

A report by S&P/Case-Shiller says that housing prices across America have plunged by 3.2 percent in the second quarter, the largest decline in 20 years. Still, the decline is also starting to fuel interest in buying homes as prices drop. Those intending to buy a home have increased by one percent over last year, according to the Conference Board survey.

The other problem is the psychological aversion to risk that has extended beyond consumers and the banking industry to a much broader portion of the business world.

While some economist believe there could be a recession, the majority think while there'll be a downturn in consumer spending, that a recession can still be avoided.

The FED and Bernanke are hoping things aren't as bad as thought, as there is increasing pressure to cut interests rates, something Bernanke is fighting against as he wants the focus of his tenure to be on battling inflation.