Consumer confidence declines in US

US consumer confidence declined unexpectedly in March from a five-year high amid oil price hike, volatile stock market and the housing recession showing few signs of ending. The New York-based Conference Board index for March fell to 107.2 from 111.2 a month before. The recent data has provided fresh indication that rising gas prices, falling home values and a volatile stock market may hit spending in the coming months. Experts and analysts had expected a reading of 109. The March index was the lowest since November 2006 when the reading came at 105.3. The consumer data obviously reflects a tense environment of the economy, as anxiety has been growing that turbulence in subprime mortgages, the home loan market for people with weak credit histories, may proliferate to other areas of the economy. A chain of housing indicators have also suggested that the housing market is in a worse condition than many thought. the S&P/Case-Shiller home-price index suggests that home prices in 20 metropolitan areas slipped considerably by 0.2 per cent in January, their first drop in six years. In addition to it, following weaker economic performance and turmoil in stock market earlier this month resulted in bring business investment at an extremely low level. At the same time core inflation levels remains above the Federal Reserve’s preferred upper limit. In the meanwhile, Lynn Franco, director of the Conference Board Consumer Research Center, has reportedly said that despite diminished expectations, consumers’ assessment of the economy was stable and the report does not ‘suggest a weakening in economic conditions.’

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