Published July 11, 2009

Latest US Data
Consumer confidence takes a dive

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(Washington)

US consumer sentiment wilted in early July to the weakest since March, when confidence in the financial sector and economy were at a low ebb, the Reuters/University of Michigan Surveys of Consumers showed yesterday.

Consumers' rising concerns about a protracted economic downturn, job security and erosion of wealth were the main factors depressing sentiment, the survey said.

Its preliminary index of confidence for July fell to a reading of 64.6 from the final reading for June of 70.8.

July's preliminary reading was well below economists' median forecast for 70.5 and the first fall in the index since February.

'It underlines the ongoing gloom facing the US consumer and further delays prospects for a near-term recovery. That will weigh heavily on risk sentiment,' said Brian Dolan, senior currency strategist with Forex.com in Bedminster, New Jersey.

The survey's index of consumer expectations fell to 60.9 from June's final reading of 69.2.

The index of current economic conditions slipped to 70.4 from June's final reading of 73.2.



In another development, the US trade gap narrowed unexpectedly to US$26 billion in May to the lowest reading since November 1999 as exports rose despite weak global demand and imports shrank, government data yesterday showed.

The stronger than anticipated export performance could bolster the contribution of trade to economic growth in the second quarter, which is forecast to contract at a slower pace than in the previous three months as the country's recession abates.

A separate report from the Labor Department showed that import prices jumped 3.2 per cent last month while export prices were up 1.1 per cent. -- Reuters