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Tuesday, April 26, 2005

Bloomberg: U.S. April Consumer Confidence Index Falls to Five Month Low

Consumer confidence fell from 103 to a five month low of 97.7 in April:

U.S. April Consumer Confidence Index Falls to 97.7 From 103 April 26 (Bloomberg) -- U.S. consumer confidence fell to a five-month low in April as record gasoline prices and doubts about job prospects threatened to slow the world's largest economy, a private survey showed…

The article notes that:

...a decline in confidence doesn't always mean lower consumer spending, which accounts for more than two-thirds of gross domestic product...

However, if there was no relationship between confdence and spending, the index would not tell us anything useful. It often does mean lower spending, and a fall in confidence is unlikely to increase spending, so this is not encouraging news.

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