US shoppers' gloom at 2003 level

Consumer confidence in the US fell to a fresh five-year low in April, according to the latest survey from the Conference Board.

The index now stands at 62.3, down from 65.9 in March. It is the lowest reading since March 2003, when it stood at 61.3, just before the invasion of Iraq.

The index is based on the responses of 5,000 US households.

The proportion of them planning to go on holiday in the next six months fell to a 30-year low.

That is "another sign of consumers turning more cost-conscious", according to Lynn Franco from the Conference Board Consumer Research Center.

"Consumers' outlook for the economy, the job market and their income prospects remains quite pessimistic."

"Or, in other words, the glass remains half empty," she added.

The Conference Board's index is seen as a good indicator of future consumer spending, which makes up the bulk of US economic activity.

But analysts said that spending had not yet fallen as much as the level of confidence would suggest.

"Consumers haven't been this depressed in a long time," said Chris Rupkey from Bank of Tokyo Mitsubishi in New York.

"Spending certainly isn't tumbling as you would expect, given this quite depressed consumer confidence and the decline in home prices," he added.

"It is kind of a one-two punch and consumers are pessimistic, but they haven't stopped spending."

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