According to the RBC Cash Index, consumer confidence dropped to its lowest level since the index began in 2002. The gloomy outlook comes despite recent actions by the Federal Reserve designed to bolster the economy. The Fed slashed interest rates twice over the span of just eight days in January - its most aggressive rate reductions in two decades.
But other forces are weighing heavily on consumers. U.S. employers cut jobs in January for the first time in more than four years, and wage growth also appears to be slowing.
All the economic uncertainty isn't endearing politicians to the electorate. According to an Associated Press-Ipsos poll, just 29% of the public approves of the president's handling of the economy. Overall, Bush's approval rating stands at 30% while Congress's tally plummeted to just 22 percent.
Facing the distinct prospect of an election-year recession, the White House and Congress this week took matters into their own hands.
During his State of the Union speech last month, President Bush verbalized the concern of millions of Americans. The Administration called on Congress for some kind of package to stimulate the economy.
This week, after several days of wrangling, both legislative bodies came to an agreement. The final outcome was a $168 billion stimulus package designed to boost the nation's lagging economy.
Once signed by the President, most taxpayers will receive a cash infusion directly into their wallets. The act will rush rebate checks of $600 to $1200 to most taxpayers and $300 checks to disabled veterans, the elderly and other low-income people.
President Bush hailed the measure as robust, broad-based, and, timely. Bush went on to say the legislation will be effective and help stimulate consumer spending and accelerate needed business investment.
The rebates will be based on 2007 tax returns and should begin arriving in May.