Americans' confidence in the shaky US economy slumped to its lowest level since June 1996, according to a survey released today by a prominent business research group.
The Conference Board said its Consumer Confidence Index fell nearly nine points to 106.8, reflecting growing pessimism over the outlook for the next six months.
A bleak employment outlook and weakening business conditions pushed the overall index down for the fifth straight month to 106.8 from a revised 115.7 reading in January.
But the organisation said that despite the gloom, the index does not signal the US economy is entering a recession.
'The erosion in consumer confidence continues to be fueled by weakening expectations regarding business and employment conditions,' said Lynn Franco, director of the board's consumer research center.
'While the short-term outlook continues to signal a severe economic downturn, consumers appraisal of current economic conditions suggests we are still undergoing moderate growth and not a recession.'
Analysts say the consumer confidence figure is closely watched by the Federal Reserve as an indicator of economic momentum, and that the slide in confidence could trigger a further cut in short-term interest rates. Some economists have said that a weak consumer confidence report might prompt a cut in rates as early as this week.
The Conference Board, a research group financed by major international corporations, surveys 5,000 US households nationwide to compile its monthly index.
