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NEW YORK, June 6 (Reuters) - U.S. consumer confidence was steady in the latest week but remained near seven-month lows as high gasoline prices and a shaky job market took their toll.
ABC News and The Washington Post said their Consumer Comfort index was unchanged at -17 in the week ended June 4.
The survey's components suggested fewer Americans felt comfortable about their personal finances, but a slightly larger number also said it was a good time to make purchases.
Confidence measures are generally viewed as a barometer of consumer spending, which accounts for two-thirds of the U.S. economy.
While consumers do not always act in accordance with their statements to surveys, broad downward trends in sentiment do usually herald more turbulent economic periods.
Analysts generally expect the economy to slow this year as a tapped-out housing market peters out and persistently high energy costs eat into spending.
WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Monday the U.S. economy was starting to shift to a slower pace of economic growth but the Fed needed to be vigilant to make sure inflation stays under control.
"It is reasonably clear that the U.S. economy is entering a period of transition," Bernanke said in remarks prepared for a group of bankers. "The anticipated moderation of economic growth seems now to be under way."
Bernanke expressed concern over rising core inflation, saying it had reached levels that "if sustained" would be at or above the upper end of the range he views as consistent with price stability.
"With the economy now evidently in a period of transition, monetary policy must be conducted with great care and with close attention to the evolution of the economic outlook as implied by incoming information," he said. "Given recent developments, the medium-term outlook for inflation will receive particular scrutiny."
US stocks slip amid interest rates fears
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June 7, 2006 - 8:04AM
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NEW YORK - US stocks slipped amid fears that inflation will lead to the US Federal Reserve hiking up higher rates even as the economy slows.
The Dow Jones industrial average was down 46.58 points to 11,002.14. The Standard & Poor's 500 Index lost 1.44 points to 1263.85. The Nasdaq Composite Index slipped 6.84 points to 2162.78.
Trade Deficit Widens, Import Costs Rise: U.S. Economy Preview
June 4 (Bloomberg) -- Rising oil prices widened the U.S. trade deficit and drove a gain in the cost of imported goods, economists said in advance of government reports this week.
The trade gap rose to $65 billion in April from $62 billion the previous month, according to the median estimate of economists surveyed by Bloomberg News. Import prices rose 0.7 percent in May, after a 2.1 percent gain the previous month, economists project a separate report the same day will show.
Surging fuel costs may be leading to a slowdown in consumer spending and hiring that is likely to cause the economy to lose momentum this quarter. Federal Reserve policy makers meeting at the end of the month face the task of determining whether slower growth or faster inflation poses a bigger threat to the economy.
``Higher rates and higher commodity costs have been a double whammy for the economy,'' said Brian Bethune, an economist at Global Insight Inc., a Lexington, Massachusetts, forecasting firm.`` We have seen very concrete evidence of a slowdown. The Fed is going to have to regroup.''
The Commerce Department is due to issue its April trade report on June 9. The deficit reached a record $68.6 billion in January.
The Labor Department report on May import prices, also scheduled to be released June 9, will give economists a jump on predicting what effect oil prices had on last month's trade account.
The cost of imported petroleum rose 11.5 percent in April from a month earlier, the biggest increase since March 2005, according to the Labor Department's import-price report issued last month. Compared with a year earlier, the price was up 32.5 percent.
Service Industry Growth
Rising gasoline prices drove consumer confidence down last month and restrained sales at some retailers. A slowing in consumer spending probably held back growth in service industries last month, a private survey due tomorrow is expected to show.
The Tempe, Arizona-based Institute for Supply Management's index of non-manufacturing businesses, which covers almost 90 percent of the economy, fell to 60 in May, the lowest since January, from 63 a month earlier, according to the median estimate of economists surveyed. Readings greater than 50 signal expansion.
Retailers, builders and real estate companies probably contributed most to the drop in the index, economists said.
``Fuel prices continue to be a top concern for our customers,'' Wal-Mart Stores Inc. Chief Financial Officer Tom Schoewe said last week.
Store Traffic
May sales at stores open at least a year rose 2.3 percent, at the low end of Wal-Mart's forecast range. Store traffic at the world's biggest retailer fell last month as shoppers made fewer trips and limited spending to items such as food, the Bentonville, Arkansas-based company said.
The U.S. economy, the world's largest, will probably grow at an annual pace of 2.5 percent to 2.75 percent this quarter, about half the previous quarter's 5.3 percent pace, according to a forecast by economists at Banc of America Securities LLC in New York.
In other reports this week:
Wholesalers boosted inventories by 0.5 percent in April after a 0.2 percent gain a month earlier, a Commerce Department report June 8 is likely to show, according to the survey of economists.
Consumer credit probably rose at a $3.5 billion annual rate in April compared with a $2.5 billion increase the previous month, the Fed is expected to report June 7. A jump in auto loans after sales improved that month contributed to the increase, economists said.
The number of first-time claims for unemployment insurance benefits probably fell to 330,000 in the week ended yesterday from 336,000 the previous week, the Labor Department is expected to report June 8.
Friday, June 2, 2006
Rising gas prices hurt U.S. auto makers, help Japan's
By DEE-ANN DURBIN
THE ASSOCIATED PRESS
DETROIT -- Increasing gas prices took a toll on the U.S. auto industry last month, flattening sales and causing steep declines for some trucks and sport utility vehicles but giving a boost to Japanese automakers whose new subcompacts hit the market at the right time.
General Motors Corp. said sales were down 12 percent for the month, while Ford Motor Co. reported a 2 percent decline and DaimlerChrysler AG's Chrysler Group saw sales fall nearly 11 percent.
