US consumer confidence plunged in August to its lowest level in nine months, reflecting rising concerns over business and job prospects across the country, the Conference Board said Tuesday.
The board’s consumer confidence index dropped to 60.6 from 65.4 in July, though still well above the 45.2 index level of August 2011.
“A more pessimistic outlook was the primary reason for this month’s decline in confidence,” said Lynn Franco, director of the Conference Board’s economic indicators.
“Consumers were more apprehensive about business and employment prospects, but more optimistic about their financial prospects despite rising inflation expectations,” she said.
“Consumers’ assessment of current conditions was virtually unchanged, suggesting no significant pickup or deterioration in the pace of growth.”
US stock markets, which had expected a slight increase in the confidence gauge, sank immediately following the release of the data, but had rebounded 30 minutes later.
Analysts said the fall in the index offset a likewise unexpected sharp jump the month earlier.
“We view it as largely reversing the surprising rise a month ago, with the trend closer to flat over two months,” said Jim O’Sullivan, chief US economist at High Frequency Economics.