American consumers lost confidence this month after fuel prices rose and stocks fell by the most in more than four years, a private report showed today.
By Bob Willis
March 16 (Bloomberg) -- American consumers lost confidence this month after fuel prices rose and stocks fell by the most in more than four years, a private report showed today.
The Reuters/University of Michigan's preliminary index of sentiment declined to 88.8 in March, the lowest reading since September, from 91.3 in February. The figure compares with an average of 87.3 in 2006.
``This reflects what the consumer thinks of that stock- market drop we saw,'' Ellen Zentner, an economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. ``Consumer spending is slowing and that's going to be reflected in these confidence numbers. Whether your average consumer is an investor or not he still looks to the stock market to get a sense of the financial health of households.''
The biggest single-day plunge in the Dow Jones Industrial Average since July 2002 left Americans feeling less wealthy, and a 15-cent-a-gallon increase in regular gasoline prices put a dent in household budgets. Rising defaults on subprime mortgages added to concern that home prices would decline further.
The Michigan confidence index was expected to fall to 89.0, the median estimate of 59 economists in a Bloomberg News survey. Forecasts ranged from 85 to 93.3.
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