May consumer confidence falls to near 16-year low

[marmar]

AP, via Yahoo!:



May consumer confidence falls to near 16-year low
By ANNE D'INNOCENZIO, AP Business Writer
54 minutes ago



NEW YORK - Soaring gas prices and weakening job prospects left shoppers gloomier about the economy in May, sending a key barometer of consumer sentiment to its lowest level in almost 16 years.

The New York-based Conference Board said Tuesday that its Consumer Confidence Index dropped to 57.2, down from a revised 62.8 in April. Economists surveyed by Thomson Financial/IFR had expected a reading of 60.

The May reading marks the fifth straight month of decline and is the lowest since the index registered 54.6 in October 1992 when the economy was coming out of a recession.

Economists closely watch sentiment readings since consumer spending accounts for more than two-thirds of the nation's economic activity.

"Weakening business and job conditions coupled with growing pessimism about the short-term future have further depleted consumers' confidence in the overall state of the economy," Lynn Franco, director of the Conference Board's Consumer Research Center, said in a statement.

Franco said consumers' worries about inflation, fueled by increasing prices at the gas pump, are now at an "all-time high" and are likely to rise further in the months ahead. She added that based on consumers' outlook on the economy, she believes there's little likelihood of a quick turnaround.

Mark Vitner, senior economist with Wachovia Corp., agreed, saying that as "awful as these numbers" look, he doesn't believe that confidence has bottomed out yet, an ominous sign for consumer spending.

"Higher gasoline is of immediate concern," Vitner said. " A lot of the extra money is going toward gas and food." And he doesn't see consumer sentiment improving until gas prices start receding.

The Conference Board index that measures shoppers' current assessment of economic conditions declined to 74.4 in May from 81.9 in April. The index that gauges their outlook over the next six months declined to 45.7 from 50.0 in April. ......(more)

The complete piece is at: http://news.yahoo.com/s/ap/20080527/ap_on_bi_ge/consumer_confidence

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1. Hmmm -- and 16 years ago the president was ...