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US consumer comfort slumps to weakest level since Dec

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Consumer confidence fell to the lowest level since mid-December as Americans grew more pessimistic about the economy, their finances and the buying climate.

[WASHINGTON] Consumer confidence fell to the lowest level since mid-December as Americans grew more pessimistic about the economy, their finances and the buying climate.

The Bloomberg Consumer Comfort Index decreased to 42 in the week ended May 1 from 43.4 in the prior period. Of the three sub-indexes, the buying-climate measure fell the most, registering its biggest drop since the end of February.

The comfort index mirrors the behavior of the Conference Board and University of Michigan confidence gauges, both of which have deteriorated this year amid the financial-market turmoil, weak economic growth and election-year uncertainty. Improvement in the labor market and bigger wage gains would help convince households that it's a good time to spend.

The report's buying-climate measure fell to 38.2 last week from 40 in the prior period. The personal finances gauge dropped to 55.3 from 56.8, the biggest slide since the week ended Nov. 1.

The index measuring the state of the economy declined to 32.6, matching the lowest this year, from 33.5.

Sentiment fell in five of seven income brackets, with households making US$15,000 to US$40,000 posting the only gains. Confidence among people earning US$50,000 to US$75,000 fell to the lowest level since September.

Among other details, the comfort measure fell in every region except the Midwest, where it held steady. Confidence among people without a high school degree declined to the lowest level in a year, while it was the weakest since early December for those working full-time jobs.

BLOOMBERG