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Tuesday, 28 May, 2002, 23:14 GMT 00:14 UK
US consumers fear sluggish economy
US economy graphic
Consumer confidence in the United States rose in May but many shoppers took a bleaker view of their longer term prospects, the closely-watched Conference Board survey has found.

Since consumer spending makes up two-thirds of the US economy, pessimistic shoppers could mean a slower recovery.

"The bottom line is that consumers still see economic conditions getting better but the degree of improvement is less," said Mark Vitner, economist at Wachovia Securities.

Fears that the US economic recovery lacks pace have been growing and the latest data pushed Wall Street's leading share indexes downwards on Tuesday.

Shares lower

The Nasdaq closed half a percent lower at 1,652.17, while the Dow Jones slid 1.2% to close at 9,981.58.

The Conference Board's consumer confidence index rose to 109.8 in May, from 108.5 in April, showing an increase in the proportion of consumers who are upbeat about their present circumstances.

But when it came to the outlook six months ahead, the index had slipped lower for the second month in row, down to 109.4 in May from 109.6 in April.

Consumers said they were less likely to be making big purchases in six months' time and only 13.7% thought the job market would improve, compared to 14.8% in April.

Still spending more

But present spending patterns showed every sign of an upbeat mood, with Americans splashing out on homes and big, costly items.

Consumer spending rose half a percent in April after increasing 0.3% in March, a separate report from the US Commerce Department showed.

Sales of existing homes also jumped 7% on the previous month to 5.7 million as Americans took advantage of low interest rates, the National Association of Realtors said.


Economic indicators

Fears and hopes

US Fed decisons

IN DEPTH
See also:

18 Apr 02 | Business
17 Apr 02 | Business
07 Mar 02 | Business
16 Apr 02 | Business
18 Apr 02 | Business
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