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Fixing the Economy: Consumer Confidence

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    Gallup surveys report new low for this year

  • Duration 2:29
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We begin a ten part series looking at possible ways to fix the struggling economy.

First -- chief Washington correspondent James Rosen on consumer confidence.

Y two K the dawn of the new millennium and also according to data kept by the conference board.

The peak of American consumer confidence with a 144 point seven posted in January 2000 the highest measurement ever of this crucial statistic.

Since economists first developed it back in 1967.

So they asked consumers various questions about how they stand right now how they think they economy's going in the future that is everybody's kind of gloomy about the future yet people don't spend they don't invest they don't take risks -- the economy is likely to remain on a slow growth or even recession -- Gallup surveys this month found consumer confidence hitting a new low for the year a reflection analysts said of dismal job growth and Wall Street declined.

President Obama cited still another factor high gasoline prices it has enormous impact on family budgets and on the psychology of consumers that consumer confidence is a function of psychology quite literally all in the mind of the average consumer.

Leads economists to differ over how directly -- president of the United States can affect it.

A lot of presidents try to do this right when they talk about how they're gonna invest in our country how they're gonna invest in our roads and education.

And I think -- wallet and actually work people -- This idea.

And but I actually thing that people are like tired and they also understand that nothing really good ever comes out of it.

I think a lot of people argue the Franklin Roosevelt did you know he made the speech behind him have to fear is fear itself.

He was a man that -- if you see the clips projects a lot of confidence I think Ronald Reagan -- a lot of confidence.

Across Ronald Reagan's presidency consumer confidence rose by 41%.

The best showing for any chief executive since 1967.

The steepest plunge came after the tumultuous month of October 1973.

Which brought the Nixon impeachment drive and Watergate the on -- -- war and the OPEC oil embargo.

By that Christmas consumer confidence had shrunk by more than a third.

After 9/11 by contrast confidence fell only two and a half percent and quickly rebounded.

Business confidence also appears to be flagging a Wall Street Journal survey of companies conducted in March found 67%.

Saying they plan to cut at least some spending.

Allocated for business development.

In Washington James Rosen Fox News.

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