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Consumer Confidence Drops Sharply
Sep 13, 2005

NEW YORK, Sept 13 (Reuters) - U.S. consumer confidence in the economy fell to its lowest level since June 2004, driven down by the concerns over high gasoline prices and Hurricane Katrina's destruction along the Gulf Coast, ABC News and the Washington Post said on Tuesday.

ABC News and the Washington Post said their Consumer Comfort Index fell to -20 in the week ending Sept. 11 from a revised -15 the prior week.

Earlier on Tuesday, Investor's Business Daily and TechoMetrica Market Intelligence said their measure of monthly economic optimism fell to an all-time low of 41.2 in September in the wake of the hurricane's destruction.

The index is a four-week moving average and two of the four weeks have occurred after Hurricane Katrina hit.

All three components of the ABC/Washington Post index fell in the latest week. The percentage of Americans with a positive view of the economy fell to 32 percent from 40 percent.

The number of consumers with positive views of their personal finances slipped to 56 percent from 57 percent, while only 32 percent of Americans thought the buying climate was good down from 39 percent a week ago.

Confidence measures are generally viewed as a barometer of consumer spending, which accounts for two-thirds of the U.S. economy. However, economists note that consumers do not always act in accordance with their statements to surveys.

The ABC/Washington Post confidence index was based on a sample of about 1,000 interviews conducted in the four weeks ending Sept. 11 and has a margin of error of plus or minus 3 percentage points.