In this May 27, 2011 photo, a customer fuels up his car in view of gas prices, in Philadelphia. A monthly survey shows consumers are losing faith that the economy will keep improving. (AP Photo/Matt Rourke), On Tuesday May 31, 2011, 1:51 pm
NEW YORK (AP) -- Americans are losing faith that the economy will keep improving, according to a monthly survey.The Conference Board's Consumer Confidence Index fell to a six-month low of 60.8 from a revised 66 in April, a sign of the toll that high gas prices, a choppy job outlook and a moribund housing market are taking on people's psyches. Economists had expected an increase to 67.
"Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects," said Lynn Franco, director of The Conference Board Consumer Research Center. She said fears of inflation that had eased in April picked up again in May.
The index, released Tuesday, is still far from the reading of 90 that indicates a healthy economy. It hasn't approached that level since the recession began in December 2007.
The results paint a different picture than earlier this year, when many hoped the economic recovery was gaining steam. In February, consumer confidence hit a three-year high. But since then, consumers have started paying more for food and gasoline and are seeing a "double dip" in the housing market.
Part of the problem in May was that the confidence survey's cutoff of May 18 did not give consumers enough time to react to falling gas prices, which peaked early in the month, IHS Global Insight Economist Chris Christopher said.
"We expect consumer confidence to pick up next month because those respondents will be able to show appreciation for falling gasoline prices," he added.
Still, gasoline isn't consumers' only worry, said Moody's Chief Economist John Lonski.
"Expectations of higher prices coupled with expectations of lower income makes for a more anxious consumer," he said. "The takeaway here is employment and income are not growing rapidly enough to sustain an extended stay by rapid inflation."
Economists monitor confidence because consumer spending, including big-ticket items such as housing and health care, accounts for about 70 percent of U.S. economic activity and is critical for a strong economy. A more troubled outlook raises the risk that people will pull back on spending.
Food makers have raised prices to offset sharply higher commodity costs, and that's putting pressure on household budgets, particularly for middle- to lower-income people. Retail gasoline prices peaked at a national average of about $3.98 on May 5, according to auto club AAA, Wright Express and Oil Price Information Service, but gas prices still remain stubbornly high. The consumer confidence survey ran from May 1-18.
Real estate also remains depressed. Home prices fell nationwide for the eighth straight month, according to the Standard & Poor's/Case-Shiller 20-city index released Tuesday. Home prices in major areas have reached their lowest level since the U.S. housing bubble burst in 2006, stymied by foreclosures, a surplus of unsold homes and a reluctance to buy into a falling market.
This month's report marked a "double dip in home prices across much of the nation," said David Blitzer, chairman of the Index Committee at Standard & Poor's.
And the job market remains sluggish. A Labor Department report last week said more people applied for unemployment benefits last week, the first increase in three weeks.
The number of Americans seeking unemployment benefits rose by 10,000 to a seasonally adjusted 424,000. That's above the 375,000 level consistent with sustainable job growth. They peaked at 659,000 during the recession.
Consumers' opinion about current conditions declined only slightly. Their expectations for the next six months fell more. The number of people expecting jobs to grow in the next six months declined, and the number of people expecting fewer jobs during the same period increased.
Elizabeth Castner, who just finished her freshman year at Brown University, said she managed to line up a paid research internship for the summer, but many of her classmates weren't so lucky and have struggled to find work.
"You spend a ton on this education that's supposed to get you really far," said Castner, 19 and a biochemistry major. "And when you get out, it's tough to find work, or work that you love doing."
AP Retail Writer Christina Rexrode contributed to this report from New York.
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1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentLu Report Abuse
It is only "unexpected" to those who are brain dead or frantically trying to protect the Obama administration from the reality that its economic philosophy does NOT work, unless, of course, it WANTS the economy to fail to increase dependence on government and thus government control.
Reply- 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentTrappedinwv Report Abuse
The only thing that I think is unexpected is how stupid these ivy league econ and journalist school graduates are.
Reply - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentsylvie Report Abuse
lmao!!! unexpectedly? give the people a break! what do you guys want bailed out of now? lack of consumers that are able to buy your crap???
Reply - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentPhil Report Abuse
Lock & Load Lets go to DC
Reply - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentBobbala Report Abuse
Communist Manifesto
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1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.
3. Abolition of all rights of inheritance.
4. Confiscation of the property of all emigrants and rebels.
5. Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.
6. Centralization of the means of communication and transport in the hands of the state.
7. Extension of factories and instruments of production owned by the state; the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan.
8. Equal obligation of all to work. Establishment of industrial armies, especially for agriculture.
9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.
10. Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc. - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentindy Report Abuse
Who expects this crap? I have yet to read a economic perdiction telling me what they expect 30 days from now. I have learned to expect this same old song and dance from this administration and the AP.
Reply - 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentEntertain_us Report Abuse
Keynesian economics was created ex-post facto to justify the creation of the Federal Reserve CORPORATION. And _expectedly_, they both rely on the same basic assumption: there will be infinite growth, i.e., growth will continue forever. Had they read Aesop's fables, they would have known that infinite growth leads to a large popping sound and everybody will be covered in toad-goo. Maybe they did know, but they and their progeny have lived well off the backs off everyone else for the last 100 years. But now, the assumption has shown itself to be false, and the entire economic model upon which their existence has been based is collapsing. So to buy themselves time to figure out what to do next, they will plunge the world into chaos: war, famine, riots, etc. Just FYI...do what you think is right.
Reply - 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentManly HA Report Abuse
The problem is not that things are getting worse. The problem is the media is losing control of the masses. Too @#$% many are starting to think for themselves.
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The media's lies and distortions have to get bigger and stronger to counteract the facts. I have faith that they will prevail. Americans are pretty easy to control. - 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this commentMarv Report Abuse
Well I for one am completely confident that the little guy is being screwed.
Reply - 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this commentTed Redford Report Abuse
Shocking facts the US Census Bureau:
Social Security Income is going to be the primary source of retirement income for most Americans.
Most Americans are going to have to work in retirement 30 hours/ week to supplement that income.
Many will perhaps skip meals because there is little money left over after basic expenses.
This is not fiction. It will be fact.
Why? Because people are making a choice to live like this.
People who work for the government are living off you, the average taxpayer.
You pay for their retirement, their benefits, yet you can't even retire youself!
Learn the real facts and get prepared!
G○○gle the term CASHES' TEACHER and click the very first site. Go right to the STOCK page to see what the rich do not want you to know.
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