Consumer confidence eases, inflation view jumps

Tue Mar 27, 2012 11:35am EDT
 
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By Leah Schnurr

NEW YORK (Reuters) - Americans this month ratcheted up their expectations on inflation to the highest level in 10 months and consumer confidence waned, though the economic recovery was still seen on track.

Separate data on Tuesday showed home prices were unchanged in January from December, the first time since July the seasonally adjusted S&P/Case-Shiller 20-city index has not declined, a sign the battered housing market is slowly stabilizing.

A report from industry group The Conference Board showed the index of consumer attitudes eased to 70.2 from an upwardly revised 71.6 the month before, roughly in line with economists' expectations for 70.3.

The details of the report were mixed as consumer expectations fell, but their assessment of their current situation rose to the highest level since September 2008.

The improvement in consumers' view of their present situation suggests they still feel the economy is not losing momentum, the report said.

But expectations for inflation in the coming year jumped to the highest level since May 2011 at 6.3 percent from 5.5 percent.

"The biggest moving part in that scenario has been gasoline prices. So that's certainly on consumers' radar screen - or dashboard as the case might be," said Carl J. Riccadonna, director and senior U.S. economist of global markets research at Deutsche Bank Securities in New York.

Rising gasoline prices have sparked worries that already fragile consumers could start to feel squeezed, putting a dent in the economy. Prices at the pump reached $3.92 cents a gallon last week.   Continued...

 
A woman carries shopping bags at South Park mall in Charlotte, North Carolina November 25, 2011. REUTERS/Chris Keane