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Friday, 14 June, 2002, 14:42 GMT 15:42 UK
Consumer concern for US economy
Doubts over the US economic recovery are growing
Consumer confidence has slumped in the US, spelling trouble for the country's fragile economic recovery.

The key University of Michigan consumer sentiment index - which measures shoppers' willingness to spend - fell to 90.8 in May, down from 96.9 in April - far worse than the 96.6 widely predicted by analysts.

The index is a vital indicator of the prospects for the US economy, as consumer spending accounts for more than two thirds of economic activity in the States.

The figures have exacerbated fears that the US economy's tentative recovery could yet be undermined by a drop in consumer spending.

They follow data out on Thursday which showed a sharp decline in May retail sales.

Stocks plunge

The news weighed heavily on the US stock market, with the benchmark Dow Jones share index falling 1.4% in early trade on Friday, extending Thursday's hefty losses.

The current conditions index, which tracks consumers' views about their present financial situation, fell in June to 97.9 from 103.5 in May.

The expectations index, which measures attitudes about the 12 months ahead, also fell, slipping to 86.2 from 92.7 in May.

There was further downbeat news for the US economy on Friday, with official figures showing that industrial output rose just 0.2% in May.

That was below most economists' forecast of a 0.3% increase.

However, it was the fifth consecutive increase after output fell in 14 of the 15 previous months.

On a year-on-year basis, industrial production in May was down 1.6%.

The rise in industrial output in May was widespread, with all main sectors showing increases in production, with the exception of utilities.


Economic indicators

Fears and hopes

US Fed decisons

IN DEPTH
See also:

13 Jun 02 | Business
28 May 02 | Business
18 Apr 02 | Business
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