[WASHINGTON] Consumer confidence in the US slipped last week to a six-month low as views of the buying climate softened, indicating a re-acceleration in household spending may be slow to materialize.
The Bloomberg Consumer Comfort Index fell to 40.5 in the seven days ended May 31 from 40.9 in the prior week. It marked the eighth straight week of declines, the longest such period since the survey began in 1985, after the index reached an almost eight-year high in April.
"In short: It's a serious sell-off," Gary Langer, president of Langer Research Associates LLC in New York, which produces the data for Bloomberg, said in a statement. "Weakened views of the buying climate bear the brunt of the blame for the index's recent troubles."
Sentiment has retreated in recent months as consumers pay more at the gas pump and weak wage growth makes households less enthusiastic about their finances. Employment opportunities and further gains in the housing and stock markets may help underpin spending.
The confidence survey's buying climate gauge, which measures whether now is a good time to purchase goods and services, fell to 34.2, the lowest level since mid-November, from 35.5. The index of personal finances decreased to a three- month low of 54.4 last week from 54.9.
The measure of Americans' views on the current state of the economy climbed for the first time in eight weeks, rising to 32.9 from 32.3 in the prior period.
Higher gasoline prices may be one reason attitudes on the buying climate have soured. While cheap fuel helped boost sentiment earlier this year, confidence began to erode after costs picked up in February.
The average price of a gallon of regular gasoline was $2.76 as of June 3, the highest since Dec 1, according to US motoring group AAA. That compares with a more than five-year low of $2.03 seen in January.
At the same time, speculation that the Federal Reserve is discussing when to raise interest rates may also be creating uncertainty with regard to the buying climate. Fed Chair Janet Yellen and her colleagues have said they need to see further improvement in the labour market and to be reasonably certain that inflation will move back up toward the central bank's 2 percent goal before raising rates.
Sentiment fell in four of seven income brackets, led by a decline in the attitudes among those earning $100,000 or more. Households in that group saw confidence decline to the lowest level since September. Confidence improved the most for the poorest households in the survey - those making less than $15,000. Their sentiment levels climbed by the most since the end of April.
"The index is at recent lows among several generally better-off groups, bringing it relatively closer to its level among their counterparts," Mr Langer said in a statement.
The confidence index for blacks posted its best showing since late February, rising to 43.9 last week, while it declined to a more than six-month low of 40.8 for whites. In available data since 1990, the confidence measure has run 11.5 points higher among whites than blacks, Langer said.
On a regional basis, confidence declined in every area except the South, where it climbed by the most in eight weeks. In the Northeast, it plunged to the lowest level since November.