Consumer sentiment at lowest level since March

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http://www.reuters.com/article/GCA-Economy/idUSTRE57D2TL20090814

NEW YORK (Reuters) - U.S. consumer confidence fell in early August as a growing number of Americans fretted about their finances even though they expected the broader economy to improve, a survey showed on Friday.

KEY POINTS: * The Reuters/University of Michigan Surveys of Consumers said its preliminary reading of the index of confidence for August fell to 63.2 from 66.0 in July. This was below economists' median expectation of a reading of 68.5, according to a Reuters poll. * The index of consumer expectations fell to 62.1 in early August, its lowest reading since March and down from 63.2 in July. * "Consumers reported much less favorable assessments of their personal finances even as they were more likely to expect improved conditions in the national economy," the Reuters/University of Michigan Surveys of Consumers said in a statement. * The fewest consumers in the survey's sixty-year history reported improved finances, with many citing job losses, shorter working hours and smaller wage gains, said the survey.

COMMENTS:

STEPHEN MASSOCCA, MANAGING DIRECTOR, WEDBUSH MORGAN, SAN FRANCISCO:

"Not too good, second month in a row. Clearly bad news this morning, so the market is going to go down. Bad news means low prices. The tape has been fairly elevated so people are going to react to it. People have significant doubt about how enduring any recovery is going to be without the consumer. The authorities that be are heartened by the fact the one silver lining piece of news today has been that there has been no impact yet on CPI and there has really been no inflation impact. So as far as they are concerned, they are going to get more and more comfortable with flooding the world with liquidity."

RICHARD CURTIN, DIRECTOR OF REUTERS-U MICHIGAN CONSUMER CONFIDENCE SURVEY, ANN ARBOR, MICHIGAN:

"Consumers are very negative about their personal finance situation - the most negative since we've started recording and that goes back to 1956.

"Consumers may make exceptions, for example in cash-for-clunkers, but (purchases) are going to increase their debt. The data indicates that consumers are well aware that their homes have come down in price. (Although) there are good discounts on a wide range of goods, they're just so uncertain about the future and the job climate that they're holding off.

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