US consumer sentiment at a 28-year low

US consumer confidence is at the lowest level in 28 years as spending has slowed in a period where credit availability and the affects of the federal tax rebates are reducing.

Consumers are still concerned about rising energy and food prices as well as job layoffs and the future of the economy still remains bleak.

The pessimism in the economy has continued to threaten consumer spending and the domestic market, which is the largest part of the US economy.

With record high petrol prices and the labour market weakened by continued cutbacks, as well as a troubled housing market, inflation is now teetering at 3.4 percent.

Future consumer confidence is likely to continue to be weak as consumers polled by Reuters/University of Michigan said they expect an inflation rate of 5.3 percent over the next 12 months, which is a 0.2 percent increase from the previous month.

The trade gap has increased as exports reduced by 1.2 percent to $59.8 billion as the increase in the price of oil cancelled the gains made by the reduction of the dollar.

The Commerce Department figures showed that import prices jumped 2.6 percent in June due to the high energy costs.

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