Consumer Confidence Falls to a 16-Year Low on Fuel Prices, Housing Woes

[marmar]

from Bloomberg:



U.S. Consumer Confidence Fell More Than Forecast (Update1)

By Timothy R. Homan

June 24 (Bloomberg) -- Consumer confidence fell more than forecast this month to the lowest level in more than 16 years, raising the risk that Americans will retrench after spending their tax rebates.

The Conference Board's confidence index fell to 50.4, the lowest level since February 1992, from a revised 58.1 in May. Consumers were the most pessimistic about the future in the 41- year history of the index. A separate report today showed home prices in April dropped the most since at least 2001.

Falling property values, rising unemployment and higher food and fuel bills have shaken consumers and may cause purchases to slump once the rebate money is gone. While price increases signal the Federal Reserve may raise borrowing costs later this year, policy makers are forecast to hold the target rate unchanged tomorrow as concern over growth lingers.

``The confidence reading is grim,'' said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. ``Sure we'll get a bump up from the tax rebates, but once that is over, we're facing what is increasingly looking like an air pocket for consumers.''

Economists forecast the confidence report from the Conference Board, a private New York-based research group, would fall to 56, according to the median of 69 economists in a Bloomberg News survey. Estimates ranged from ranged from 50 to 60. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aersfm0XlvLg&refer=home

[AndyTiedye]

1. They Probably Had to Bugger the Numbers to Keep it From Falling Below 50