Consumer Confidence Unexpectedly Falls

Consumer confidence unexpectedly declined for the second straight month in August, according to the Conference Board, which Tuesday attributed the drop in its index to a deteriorating U.S. job market.

The index fell to 114.3, the lowest in four months, from a revised 116.3 in July. Analysts had been expecting a reading of 117.5, according to Bloomberg.

Consumer spending drives the economy, creating demand for new factory goods and the trucking shipments that get them to stores. If consumers are less confident, they are likely to curb their spending.

Founded in 1916, the Conference Board is a private business membership and research network that also produces the U.S. Index of Leading Economic Indicators. Its membership includes more than 3,000 companies and other organizations in 67 countries.

The board's present situation index fell from 151.3 to 145.8, but the expectations index, measuring consumer's attitudes about the next six months, rose to 93.3 from 92.9.

However, that optimism could be short-lived because Lynn Franco, director of the Conference Board's consumer research center, said that increased unemployment could translate into slower consumer spending in the months ahead.

Analysts told Reuters after the report that it has strengthened their beliefs that the Federal Reserve, which has already cut interest rates seven times this year, will probably cut rates again in the months ahead.

he consumer confidence survey is based on a representative sample of 5,000 U.S. households and conducted monthly by NFO Worldgroup for the Conference Board.

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