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WASHINGTON - Consumer confidence in the American economy sank to a nine-month low in August, the third straight monthly decline, The Associated Press reports.
The Conference Board, a private research group, reported that its Consumer Confidence Index fell to 93.5 in August, the lowest level since November, from a revised 97.4 in July.
"For the economy to start accelerating sharply, consumer confidence will have to start improving," noted one economist, Joel Naroff of Naroff Economic Advisors.
The index is looked at by economists to try to gauge the behavior of consumers, whose spending accounts for two-thirds of economic activity in the United States. But Federal Reserve Chairman Alan Greenspan has said that using confidence measures to predict consumer spending patterns is risky business.
Confidence fell in June and July, but retail sales posted solid gains in those months as free-financing offers, especially on cars, discounting and other incentives motivated buyers.
Merrill Lynch economist Gerald Cohen said while back-to-school sales have been sluggish, that should be more than offset by what he expects will be robust auto sales for August.
In a second report Tuesday, orders to U.S. factories for costly manufactured durable goods jumped by 8.7 percent in July, the largest gain since October, suggesting that businesses felt more optimistic about the appetite for their products. The advance came after a 4.5 percent drop in June.