Consumer confidence falls
By John Parry
NEW YORK (Reuters) - U.S. consumer confidence slipped in April to its lowest since last August, while sales of existing homes in March dropped more sharply than in any month since January 1989, according to reports on Tuesday that offered more evidence of a weakening economy.
The Conference Board said its index of consumer sentiment fell to 104.0 from an upwardly revised 108.2 in March.
Separately, the National Association of Realtors said March existing home sales fell 8.4 percent to a 6.12 million-unit annual rate. Existing home sales comprise 85 percent of the U.S. housing market.
Treasury bond prices rallied soon after the reports were released, while the dollar slipped and U.S. stock indexes were mixed.
"The data suggest that the economy may still be weakening, while at the same time the worst news on U.S. inflation is still to come. So the Federal Reserve is caught in the middle," said Subodh Kumar, chief investment strategist with Subodh Kumar & Associates in Toronto, Canada.
Signs that wage inflation and consumers' inflation expectations are on the rise could deter the U.S. central bank from cutting its 5.25 percent federal funds target rate for many months, even in the face of a softening economy, some economists expect.
"Rising prices at the gas pump continue to play a key role in dampening consumers' short-term expectations. The decline in the Present Situation Index -- the first decline in six months -- warrants monitoring in the months ahead, as further declines would suggest a softening in growth," Lynn Franco, director of The Conference Board Consumer Research Center, said in a press release.
Housing has been the cornerstone of U.S. economic growth over the past few years. The sector's decline is a central focus for analysts trying to gauge how sharply the U.S. economy may slow. Continued...
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