A new survey has shown that US consumer confidence slumped to its lowest level since 2003 this month. Meanwhile separate figures raised fears that inflationary pressures are on the rise again.
The Conference Board research group said its consumer confidence index dived to 75 in February, compared with 87.3 in January.
The February figure was the lowest since November 1993, with the exception of polling conducted as US forces invaded Iraqi five years ago.
'With so few consumers expecting conditions to turnaround in the months ahead, the outlook for the economy continues to worsen and the risk of a recession continues to increase,' said Lynn Franco, a director of the Conference Board's consumer research centre.
Economists monitor consumer confidence closely because consumer spending accounts for around two-thirds of all US economic growth.
Other figures showed that US wholesale inflation surged by a stronger than expected 1% in January. Economists had expected only a 0.4% monthly gain in the producer price index (PPI).
The Labor Department said the core PPI rate, which strips out volatile food and energy costs, increased 0.4% last month, also higher than expected.
US producer prices have rocketed in the past 12 months, rising at an annual rate of 7.4%. This was the biggest rise since October 1981.
Stock markets gave up some gains after the figures, as they saw a possibility that they could curb the US Federal Reserve's aggressive rate-cutting policy.
