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A reading of August s consumer confidence is forecast to drop sharply from July -- when the index reached a 6-year high -- indicating that the housing slump and credit worries may have affected spending.
The Conference Board is scheduled to issue its monthly consumer confidence survey at 10 a.m. EDT on Tuesday.
The consensus estimate of Wall Street economists surveyed by Thomson/IFR is 104.5, much lower than July s 112.6 reading. Economists latest estimates ranged from 102 to 107.6.
Wall Street monitors such data because consumer spending accounts for two-thirds of all U.S. economic activity.
Consumers were upbeat in July, which had the highest reading since August 2001, due to a strong job market and improving business conditions, the Conference Board said.
The survey is based on a representative sample of 5,000 U.S. households to measure consumer sentiment on present economic conditions and the spending outlook for the next six months. In 1985, the consumer confidence index stood at 100, according to the board. Changes of 5 points in the index are considered significant.
Consumers have had to deal with high gas prices, a deep housing slump and now problems in the credit markets, which investors worry could spread further and possibly lead to a recession.
The Conference Board s August reading follows a Reuters/University of Michigan preliminary survey released Aug. 17 that showed consumer sentiment dipped slightly for the month.
But the news isn t all bad.
Another similar survey, the RBC Cash Index, released earlier this month that indicated consumer confidence rose sharply in August and some retailers reported profits.
San Francisco-based clothier Gap Inc. reported Thursday that its second-quarter profit rose 19 percent after seven straight quarters of earnings erosion, while teen retailer Aeropostale Inc. said its second-quarter earnings soared 75 percent, despite a decline in same-store sales.
However, AnnTaylor Stores Corp. said Friday its second-quarter profit fell 27 percent, hurt by lower traffic and higher markdowns to move merchandise. |
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