Consumer confidence plummets
Surprisingly large decline in August laid to job worries
NEW YORK -- Consumers' renewed worries about job prospects led to a bigger-than-expected drop in confidence in August and provided more evidence of the fragility of the economic expansion.
The consumer confidence index, which had been rising since April, dropped to 98.2 from a revised reading of 105.7 in July, according to a report yesterday from the Conference Board, a private research group.
The reading was well below the 103.5 analysts expected, and was the lowest since May, when it registered 93.1.
''The slowdown in job growth has curbed consumers' confidence," said Lynn Franco, the director of the board's Consumer Research Center.
Economists closely track consumer confidence because consumer spending accounts for two-thirds of all US economic activity.
The report of the surprisingly large decline in consumer confidence came a day after the Commerce Department said consumers spent more freely in July, raising hopes that June's economic pause would only be temporary.
The government disclosed at the same time, however, that personal incomes grew slower than analysts expected in July.
But some economists were not deeply concerned about the dip in confidence.
Mark Vitner, an economist at Wachovia Securities, sees the latest snapshot of consumer sentiment as only a ''bump in the road" and expects the index will rebound in September.
Investors shrugged off the confidence as the Dow Jones average rose 51.40 to close at 10,173.92. The Standard & Poor's 500 index gained 5.09 to 1,104.24, while the Nasdaq Composite index was up 1.61 at 1,838.10.
