NEW YORK - Consumer confidence weakened in August as U.S. residents focused on turbulent financial markets, a decline in home prices and tighter credit standards.
The New York-based Conference Board said Tuesday its Consumer Confidence Index, declined to 105.0 from a revised reading of 111.9 in July, which was still a six-year high.
Although the index was down, it was slightly stronger than the 104.5 that Wall Street analysts expected.
"A softening in business conditions and labor market conditions has curbed consumers' confidence this month," said Lynn Franco, director of The Conference Board Consumer Research Center.
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"In addition, the volatility in financial markets and continued subprime housing woes may have played a role in dampening consumers' spirits."
The survey is closely watched because consumer spending represents two-thirds of the U.S. economy and confidence levels tend to influence spending.
"It was down, but that was widely expected with what's going on with housing," said Richard Huber, who is an economist with A.G. Edwards in St. Louis. "That's weighing on consumers."
While lower, the August reading allows Federal Reserve policymakers to take a wait-and-see approach about cutting short-term interest rates, which have remained steady at 5.25 percent since June 2006, when the Federal Open Market Committee meets Sept. 18, Huber said.
"It removes their having to cut rates because of a broad-based consumer confidence meltdown," Huber said.
In South Sound
South Sound home prices were nearly 7 percent higher in July than the same time last year, bucking the national trend, according to the Northwest Multiple Listing Service. The July median sales price in Thurston County was $275,174, the service reported.