U.S. consumer confidence drops in August

Consumer confidence fell in August as consumers worried about the business and employment outlook, according to The Conference Board.

The Conference Board's Consumer Confidence Index dropped to 60.6 in August from 65.4 in July. A reading of 90 or higher indicates a healthy economy.

The index measures how shoppers feel about business conditions, the job market and the next six months. Economists watch the index closely because consumer spending accounts for about 70 percent of economic activity and is a crucial part of a strong rebound.

Those expecting business conditions to improve during the next six months fell to 16.5 percent from 19 percent, and those expecting business conditions to worsen increased to 17.7 percent from 15.1 percent.

Additionally, 15.4 percent expect more jobs during the next six months compared with 17.6 percent in July. Those expecting fewer jobs increased from 20.6 percent to 23.4 percent.

However, those expecting an increase in their incomes improved to 15.7 percent from 14.2 percent.

"The Consumer Confidence Index is now at its lowest level since late last year," says Lynn Franco, director of The Conference Board Consumer Research Center. “A more pessimistic outlook was the primary reason for this month's decline in confidence. Consumers were more apprehensive about business and employment prospects but more optimistic about their financial prospects despite rising inflation expectations. Consumers' assessment of current conditions virtually was unchanged, suggesting no significant pickup or deterioration in the pace of growth."

Date : 8/29/2012