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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (41228)	5/28/2004 9:42:59 PM
From: Johnny Canuck	Respond to of 69307

Consumer Confidence Slips in May By THE ASSOCIATED PRESS Published: May 28, 2004 Filed at 11:20 a.m. ET NEW YORK (AP) -- Consumer optimism slipped in May despite recent strength in the labor market, according to a new survey. The closely watched University of Michigan's consumer sentiment index was at 90.2 in May, down from 94.2 in a preliminary report for the month and 94.2 seen in April, according to people in the market who saw the report Friday. Advertisement The university's measure of consumer expectations came in at 81.6 in May, down from 85.8 in the mid-month report and 87.3 in April. The current conditions index for May also fell to 103.6 from 107.2 in the mid-month report and 105.0 in April. The University of Michigan report is released only to subscribers. The souring of consumer sentiment comes amid a surge in hiring by U.S. companies after years of sluggish labor conditions. The Department of Labor has reported non-farm payrolls swelled by 288,000 in April and 337,000 in March. Higher gasoline prices and the ongoing U.S.-led occupation in Iraq, however, have been worrying developments on Main Street. The four-point decline in the headline University of Michigan sentiment index from its mid-month reading concerned some economists since such a drop is unusual and appears to contradict positive economic news elsewhere. ``This is disconcerting as it takes place in the midst of an environment where most other economic statistics -- and, notably, those related to the labor markets -- are showing solid improvement,'' said Anthony Karydakis, economist at Banc One Capital Markets in Chicago. ``Apparently the higher gasoline prices and the Iraq situation are taking a toll on consumer psychology,'' he added. The average national retail price of gasoline topped $2 earlier this month. Economists believe the higher costs at the pump will act like a tax on consumer spending, since Americans will have less money to spend on discretionary items. News about the war in Iraq, meanwhile, took a turn for the worse this month after pictures of alleged prison abuse at the infamous Abu Ghraib prison by U.S. military personnel were shown in the media. Abu Ghraib was notorious for tales of torture of prisoners under the Sadaam Hussein regime. While the declines in the University of Michigan indexes were worrying and prompted a spat of buying in the U.S. Treasury market, economists at ING Financial Markets cautioned against reading too much into the report. ``It is important to remember that the consumer confidence series is better at indicating turning points in activity rather than predicting monthly consumer spending patterns,'' ING said in a note to clients.