US consumer confidence at 28-year low

US consumer confidence has fallen to a 28-year low this month, as the Reuters/University of Michigan preliminary index of consumer sentiment fell to 56.7 from 59.8 last month.

Furthermore, a recent report has indicated that the index is likely to continue to plummet as inflation, currently at 3.4 percent, will mean that it may be a couple of years before the index recovers.

The index is at its lowest reading since May 1980, amid inflationary fears and the fact that oil prices, consumer prices and raw materials are soaring, this has had a knock-on effect on spending and indirect affects on the Labour market.

The fall is greater than economists polled by Bloomberg News had predicted who said the index would fall to 59.8 in May.

The report itself focused heavily on consumer prices and the current surge in petrol prices, which are now at $4 per gallon, has a psychological impact on the US consumer.

The index is also a good gauge for the current economic climate, and reflects the financial situation of most Americans.

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