Consumer Confidence In US Down

US consumer confidence over the course of August has declined, in the wake of ongoing turbulence on the stock exchange and poor housing results, according to a study released today.

The study conducted by the Conference Board in New York reflected consumer confidence had fallen through a decline in their Consumer Confidence Index, reflecting growing consumer unrest at the health of financial markets.

The index dropped over the course of the month from 111.9 in July to 105.0, which was still beyond widespread expectations. Nevertheless, the drop in figure shows that consumers are beginning to take note of the wider economic situation.

With consumers less confident about the health and near future of their economy, businesses could be in for lower sales, which in turn could lead to further economic worries for the US authorities to content with.

The housing market has remained sluggish over the last month, with the release of figures suggesting total home sales had fallen to a five-year low over the last week epitomising the worsening situation.

Meanwhile, the sub-prime mortgage market is continuing to haunt lenders with liquidity problems and rising foreclosures, which have led to continuing pressures on credit.

The fallout from the mortgage lending crisis has led to unrest in stock markets across the world, which has dismissed fears of further Federal Reserve interest rates.

With an adverse effect on economic growth arising through interest rate rises, the news may come as a mixed blessing, taking care of much of the threat of overheating from within the economy.

However, analysts are predicting that the knock-on effect of falling consumer confidence could hit struggling businesses hard, with the potential to lead to a full blown recession in conjunction with the sub-prime problem.

The Dow Jones today did nothing to inspire confidence, further deflating consumers as it shed over 2% on its value.

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