Surprise fall in US consumer confidence

Tuesday 29 September 2009 15.44
USA - Personal finance concerns
USA - Personal finance concerns

US house prices rose for a third month in July, but consumer confidence fell unexpectedly in September as the worst job market in 26 years fuelled worries about personal finances.

The reports show it is still early days for the US economic rebound, following the country’s worst recession in decades, and it could take a long time before consumers begin to contribute to growth.

Also, despite improvements elsewhere in the economy and a roaring stock market rally since March, the weakness of the consumer sector bodes ill for the year-end, which is traditionally a period of heavy shopping and spending.

Stocks turned negative and the dollar slipped against the yen following the weaker-than-expected consumer confidence report. US government bonds, which are investors' favourite safe haven during weak economic times, pared their earlier losses.

The Conference Board, an industry group, said its index of consumer attitudes fell to 53.1 in September, versus a revised 54.5 in August and expectations of a rise to 57.0.

Reflecting Americans' worries about employment prospects, the Conference Board's index measuring jobs ‘hard to get’ rose to 47.0 from 44.3.

At the other end of the scale, the gauge of 'jobs plentiful' fell to 3.4 from 4.3. That was the lowest since February 1983, and ties in with US Labor Department data showing the unemployment rate was at a 26-year high of 9.7% in August.

The S&P/Case-Shiller composite index of house prices in 20 metropolitan areas rose 1.6% in July from June, more than triple the estimate of a 0.5% rise found in a Reuters poll. This index rose 1.4% the month before.