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Sunday 21st of February 2010
June 30, 2009    

Conference Board reveals fall in US consumer confidence

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by Kay Murchie
”Conference

After a recent run of good news in the US, the Conference Board has today revealed a dip in consumer confidence this month.

The news came as a bit of a shock since the latest University of Michigan’s index of consumer sentiment rose from 68.7 in May to 70.8 in June - the highest level since February 2008 and is the fourth consecutive rise this year.

However, today the Conference Board said that its index of consumer attitudes fell to 49.3 in June, down from 54.8 the previous month as Americans were spooked by rising unemployment. Market forecasts were for a reading of 55.0 for June.

The news sent US stock markets down with the Dow Jones industrial average down 1.1% (94.24 points) to 8,435.14 in mid-morning trading. Meanwhile, the S&P 500 was down 1%, while the Nasdaq lost nearly 0.5%.

There have been hopes that the recession in the US is bottoming out after the Commerce Department revealed last week that gross domestic product (GDP) fell by an annualised rate of 5.5% in the first three months of 2009.

The figures were much better than previously thought and follow a 6.3% fall in the final quarter of 2008 and a fall of 0.5% in the third quarter of 2008.

Furthermore, it was reported that households’ savings hit their highest level for over a decade and a half, as a result of the country’s economic stimulus package. The savings rate reached 6.9% - the highest rate since December 1993.

Meanwhile, across the Atlantic, official figures have today revealed that the UK economy shrank by 2.4% in the first three months of 2009 - far worse than expected and the biggest quarterly decline in 51 years.

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