Why the drop in confidence?

Americans really turned gloomy in February - more so than any of the experts had expected. Most striking was the Conference Board's "Present Situation Index," which asks consumers how they feel about current business conditions and the job market. It fell to its lowest level in 27 years. The overall index dropped more than 10 points in February, which is huge. The question is why. Nothing much has changed over the past four weeks - if anything, the economic indicators have shown some incremental improvement. Perhaps the sour mood relates to all the recent news about jobs - specifically, the enormous numbers of long-term unemployed and underemployed who have very limited prospects. Remember, this is not like recessions in the 70s and 80s, when the same company that laid people off hired them right back when times got better. Coming out of this downturn, there won't be many rehires. Maybe the reality is finally starting to sink in.