Fuel hits US consumer confidence

In the US a gallon of petrol costs, on average, about $3

US consumer confidence fell sharply in May, partly driven by concerns over the price of fuel at the pump.

The short-term prospects for the economy and the availability of jobs also weighed on the mind of Americans, the Conference Board said.

Its consumer confidence index, which measure feelings about economic conditions, fell from a four-year-high of 109.8 in April to 103.2 in May.

However the mood was not as gloomy as most analysts had predicted.

Apprehension

The Expectations Index, measuring consumer outlook over the next six months, and the Present Situation Index, which gauges how shoppers feel now, also headed lower.

"Apprehension about the short-term outlook for the economy, the labour market and consumers' earning potential has driven the index down to levels not seen since the aftermath of the hurricanes last summer," said Lynn Franco, of the board's consumer research centre.

"The index bears close watching, as it is often a harbinger of times to come."

Sentiment indexes are seen as a good guide to US consumer spending.

As the cost of oil has surged, consumers have been hit by petrol prices that have increased to an average of about $3 a gallon.

Earlier this month, a survey by the National Retail Federation found that more than three out of four US consumers were curbing their spending because of the steeply-rising cost of fuel.