US consumer confidence took a hit in August amid financial market turbulence and indications of weaker business and labor market conditions, a closely watched monthly research showed today.
However, despite recent turmoil in the stock markets, consumers still remain confident.
The Conference Board said its consumer confidence index slipped to 105 from 111.9 in July.
'A softening in business conditions and labor market conditions has curbed consumers' confidence this month,' said Lynn Franco, the group's research director.
She added that volatility in financial markets and continued subprime housing woes may have played a role in dampening consumers' spirits.
She added that despite less favorable conditions consumers still remain confident, and current index levels suggest further economic growth in the months ahead.
Confidence is watched by economists as a gauge for consumer spending, which accounts for two-thirds of US economic activity.
The index last month jumped to a revised 111.9, but gave back those gains in August.
Some economists worry that the slide in the housing market and the subsequent credit squeeze may cause consumers to stop spending, worsening the economic picture.
The two sub-indexes in the Conference Board survey also fell.
The present situation index declined to 130.3 from a revised 138.3 in July and the forward-looking expectations index dropped to 88.2 from 94.4.
In the survey, the percentage of those claiming conditions were 'good' fell to 26.4% from 28.3% and those saying conditions were 'bad' rose to 16.3% from 14.5%.
The percentage who said jobs are 'plentiful' dropped to 27.5% from 30% in July while respondents saying jobs are 'hard to get' increased to 19.7% from 18.7%.
The preliminary report was based on a survey of 5,000 US households.
