Report: Consumer Confidence Plunges in July
Confidence among U.S. consumers unexpectedly fell in July to the lowest level in more than two years, adding to concern that weak employment gains and falling home prices may keep households from spending.
Bloomberg reported that the Thomson Reuters/University of Michigan preliminary index of consumer sentiment decreased to 63.8, the weakest reading since March 2009, from 71.5 the prior month. The gauge was projected to rise to 72.2, according to the median forecast of 62 economists surveyed by Bloomberg News.
Smaller jobs gains, falling home values and concern over the outcome of government debt talks may be jarring Americans, underscoring Federal Reserve Chairman Ben Bernanke comments to Congress earlier this week. The figures raise the risk that household spending, which accounts for about 70 percent of the economy, will continue to cool.
“There’s certainly been a lot of negative headlines, with the very weak employment report a week ago and the ongoing debt limit impasse,” saidJames O’Sullivan, chief economist at MF Global Inc. in New York, who predicted the gauge would fall to 68.0.