Confidence among U.S. consumers unexpectedly fell in May to the lowest level in four months as Americans grew more pessimistic about the labor market.
The Conference Boardâ€™s confidence index decreased to 64.9 from a revised 68.7 in the prior month, figures from the New York-based private research group showed today. The median forecast of economists surveyed by Bloomberg News called for a reading of 69.6.
The weakest payroll gains in six months may raise concerns that economic growth is not fast enough to bring down the jobless rate. More employment is needed to boost consumer spending, which accounts for about 70 percent of the economy.
â€œWe are making progress when it comes to the labor market, but clearly this is another sign that itâ€™s still very slow- going,â€ Aaron Smith, a senior economist at Moodyâ€™s Analytics Inc. in West Chester, Pennsylvania, whose forecast was closest. â€œWhen we see expectations get marked down, that can cause consumers to think twice about making big-ticket purchases.â€
Stocks maintained gains after the figure, with the Standard & Poorâ€™s 500 Index climbing 1.1 percent to 1,331.74 at 10:16 a.m. in New York.
Home prices in 20 U.S. cities fell in the 12 months ended in March at the slowest pace in more than a year, other data today showed. The S&P/Case-Shiller index of property values declined 2.6 percent from a year earlier, the smallest decrease since December 2010, after a 3.5 percent drop in February, the group reported in New York.
Estimates for consumer confidence ranged from 62 to 74.1 in the Bloomberg survey of 70 economists. The measure averaged 53.7 during the 18-month recession that ended in June 2009.
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