There was mixed news for the US economy from separate figures this afternoon, with a drop in consumer sentiment dampening the mood after a strong retail sales report.
A survey showed that the US consumer mood worsened sharply in early August, falling to the lowest index level since 1980 as fears of a stalled recovery combined with despair over government policies.
The Thomson Reuters/University of Michigan's preliminary August reading on the overall index on consumer sentiment fell to 54.9, the lowest since May 1980, down from 63.7 in July. It was well below economists' forecasts.
High unemployment, stagnant wages and the protracted debate over raising the US government debt ceiling worried consumers who were polled before Standard & Poor's downgraded the US government's credit rating on August 5.
'Never before in the history of the surveys have so many consumers spontaneously mentioned negative aspects of the government's role,' survey director Richard Curtin said in a statement.
Earlier figures showed that US retail sales recorded their biggest gain since March last month, easing fears that the world's largest economy might be slipping back into recession.
Sales climbed 0.5%, in line with economists' forecasts, after an upwardly revised 0.3% gain in June.
Consumer spending accounts for two-thirds of US economic activity, and the Commerce Department data indicate that the third quarter was off to a decent start.
Excluding autos, sales increased 0.5%, well above forecasts for a 0.2% gain. The figures were bolstered by a 1.6% jump in petrol station sales, in part reflecting the higher cost of fuel.
US economic growth was anaemic in the first half of the year and unemployment remained high, raising worries that the recovery might again falter.
