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Jerry Hansin 30 May 2008 World News | 3 Comments

US consumer confidence falls to 28-year low in May
Posted: 30 May 2008 2237 hrs

NEW YORK : A survey on Friday showed that US consumer confidence fell for the fourth straight month to a 28-year low in May, amid expectations of surging inflation.

The Reuters/University of Michigan Surveys of Consumers said the index of confidence fell to 59.8 from April’s 62.6.

May’s reading was the lowest since June 1980 when it stood at 58.7, and significantly below the 88.3 recorded last May and the peak of 96.9 recorded in January 2007.

The one-year inflation expectations reading was 5.2 percent, up from the prior month’s 4.8 percent, while the five-year inflation reading was 3.4 percent, also up from 3.2 percent in April.

Consumers’ ability to buy has been reduced by smaller income gains, fewer jobs, higher prices of necessities, declining home prices, rising credit standards, and record levels of outstanding debt.

Total real personal consumption expenditure growth is expected to be just under 1% in 2008, with the pace weakening until early 2009. – CNA/ms

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