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From: sylvester80	8/29/2006 10:14:54 AM
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NEWS: Consumer confidence sinks to 9-month low August reading lowest since November on worries about economy, jobs. August 29 2006: 10:08 AM EDT money.cnn.com NEW YORK (Reuters) -- Consumer confidence sank to its lowest in nine months in August as worries about job growth and the economy overshadowed the Federal Reserve's recent pause in interest-rate hikes, a survey showed on Tuesday. The Conference Board said its index of consumer sentiment dropped in August to 99.6 - its lowest since November 2005's reading of 98.3 - from 107.0 in July. Sentiment scaled a year high of 109.8 in April. The median forecast of 86 economists polled by Reuters had called for the index to fall to 103 in August. Estimates ranged from a low of 99 to a high of 106.8. "Less favorable business conditions coupled with a less favorable job scenario have resulted in the largest one-month decline in confidence since Hurricane Katrina last year," said Lynn Franco, director of The Conference Board Consumer Research Center. "Consumers are growing increasingly pessimistic about the short-term outlook," she added in a statement. The Fed's policy-setting committee voted to leave its benchmark federal funds rate steady at 5.25 percent on Aug. 8 but left the door open to future rate increases in case inflation proved tenacious. The business research group's present situation index dropped to 123.4 from 134.2 in July, while the expectations component fell to 83.8 from 88.9 last month. Labor market conditions became less favorable in August, according to the Conference Board. Consumers who said jobs were "plentiful" dropped to 24.4 in August from 28.6 percent in July while those who said jobs were "hard to get" increased to 21.1 percent from 19.6 percent. Sentiment indexes have traditionally been seen as a gauge of U.S. consumer spending, which accounts for roughly two-thirds of overall economic activity.

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