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US Consumer Confidence Slides

Lowest rating in nearly a year, according to Conference Board,

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By: TOM BRANNA

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US consumers, these days, are a glum lot. Thee Conference Board’s index of consumer confidence decreased to 60.6 from a revised 65.4 in July. The 4.8-point decrease was the biggest since October. The reading was less than the most pessimistic forecast in a Bloomberg survey in which the median projection was 66.

Why the dour outlook? Rising gasoline prices, a jobless rate that’s been above 8% since the start of 2009 and limited income gains are keeping consumers down. Analysts note that persistent pessimism raises the risk of a pullback in household purchases that account for about 70% of the world’s biggest economy.

“The consumer is still very cautious,” said Jim O’Sullivan, chief U.S. economist for High Frequency Economics Ltd. in Valhalla, New York, who projected a drop in sentiment. “The labor market is still relatively weak. There’s a lot of uncertainty about policy ahead of the election” and fuel costs have accelerated, he said.

This month’s confidence reading was the lowest since November. Estimates for the Conference Board gauge ranged from 61 to 68 in the Bloomberg survey of 77 economists. The measure averaged 53.7 during the 18-month recession that ended in June 2009.

Despite the decline, consumers did get some good news. Home prices in 20 US cities rose in the 12 months ended in June, the first year-over-year gain in almost two years and showing improvement in the industry that precipitated the last recession. The S&P/Case-Shiller index of property values climbed 0.5% from a year earlier, the group reported in New York.

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