Consumers’ mood improves

NEW YORK (Reuters) –

Consumer confidence improved slightly

in early August thanks to a drop in gasoline prices, but

worries about a recession still weighed heavily on consumers’

minds, according to a survey released on Friday.

The Reuters/University of Michigan Surveys of Consumers

said its index of consumer confidence edged up to 61.7 in early

August from 61.2 in late July. It fell short of economists’

median forecast of 62.0, according to a recent Reuters poll.

The gauge looked ominous for the U.S. economy, which is

dependent on consumer spending and currently in a fragile

state. Consumers have already been struggling for months from

the fallout of a persistent housing slump and tight credit.

“There is little doubt among consumers about the likelihood

of a recession,” Richard Curtin, director of the surveys, said

in a statement.

This grim outlook led to a drop in the report’s current

conditions index to 69.3 in early August from 73.1 in late July

and a forecast 73.2. The August reading was the second lowest

since 1980 with the lowest set in June.

The report’s expectations index, however, rose to 56.8 from

53.5 in late July. Analysts had expected a figure of 53.9.

A silver lining in the latest survey was a drop in

consumers’ inflation expectations in the next 12 months.

The one-year inflation expectations gauge slipped to 4.8

from July’s 5.1 percent, which was the biggest one-month drop

since September 2006.

The index on five-year inflation expectations held steady

at 3.2 percent.

(Reporting by Richard Leong, Editing by Chizu Nomiyama)