Consumer confidence falls unexpectedly

Associated Press

NEW YORK

Americans are losing faith that the economy will keep improving, according to a monthly survey.

The Conference Board’s Consumer Confidence Index fell to a six-month low of 60.8 from a revised 66 in April, a sign of the toll that high gas prices, a choppy job outlook and a moribund housing market are taking on people’s psyches. Economists had expected an increase to 67.

“Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects,” said Lynn Franco, director of The Conference Board Consumer Research Center. She said fears of inflation that had eased in April picked up in May.

The index, released Tuesday, is still far from the reading of 90 that indicates a healthy economy. It hasn’t approached that level since the recession began in December 2007.

The results paint a different picture than earlier this year, when many hoped the economic recovery was gaining steam. In February, consumer confidence hit a three-year high. But since then, consumers have started paying more for food and gasoline and are seeing a “double dip” in the housing market.

Part of the problem in May was that the confidence survey’s cutoff of May 18 did not give consumers enough time to react to falling gas prices, which peaked early in the month, IHS Global Insight Economist Chris Christopher said.

“We expect consumer confidence to pick up next month because those respondents will be able to show appreciation for falling gasoline prices,” he added.