Confidence among U.S. consumers fell in August by the most in 10 months as households grew more pessimistic about their employment prospects and the economic outlook.
The Conference Board’s index decreased to 60.6 from a revised 65.4 in July, figures from the New York-based private research group showed today. The 4.8-point decrease was the biggest since October. Economists projected a reading of 66, according to the median estimate in a Bloomberg survey.
Rising gasoline prices, a jobless rate that’s been above 8 percent since the start of 2009 and limited income gains are keeping consumers glum. Persistent pessimism raises the risk of a pullback in household purchases that account for about 70 percent of the world’s biggest economy.
“Things don’t look so good on the consumer front,” Chris Christopher, a senior principal economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “There is lower confidence and job prospects are not so great, so you’re seeing a very precautionary behavior set in. People don’t have much reason to spend very much.”
This month’s confidence reading was the lowest since November. Estimates for the Conference Board gauge ranged from 61 to 68 in the Bloomberg survey of 77 economists. The measure averaged 53.7 during the 18-month recession that ended in June 2009.
Another report today showed home prices in 20 U.S. cities rose in the 12 months ended in June, the first year-over-year gain in almost two years and showing improvement in the industry that precipitated the last recession. The S&P/Case-Shiller index of property values climbed 0.5 percent from a year earlier, the group reported in New York.
“We are very encouraged by our results,” Robert Toll, chairman of Toll Brothers Inc., said during an Aug. 22 call after the Horsham, Pennsylvania-based luxury-home builder’s third-quarter earnings were better than expected. “We do remain cautious in our optimism, as we believe consumer confidence remains fragile and subject to the impact of negative economic and political headlines.”
The Conference Board’s measure of present conditions was little changed at 45.8 in August after 45.9 a month earlier. The measure of expectations for the next six months slumped to 70.5, the lowest since November, from 78.4.
The percent of respondents who said they expected more jobs to become available in the next six months fell to 15.4 from 17.6 the previous month. The share who said they anticipated fewer employment opportunities rose to 23.4 percent, the highest since November.