New economic reports Tuesday say U.S. consumer confidence dropped to its lowest level in 16 years in May, as home prices fell, and gasoline costs hit record highs.
Economists track consumer confidence for clues about future consumer spending, which drives most U.S. economic activity. A business group, the Conference Board, surveyed thousands of households and found the consumer's view of the economy fell more than five percentage points, to a reading of 57.2, from the previous month.
The troubled housing market is one reason consumers are worried. A business group, Standard & Poor's / Case-Schiller, says U.S. housing prices posted their steepest drop in 20 years in April from the same period a year earlier. A separate government report said new home sales rose in April, but remain near their lowest level in 17 years.
Prices are falling because a wave of foreclosures are putting more homes on the market and stricter lending standards made it harder to get loans.
The housing reports were published the same day gasoline prices hit yet another record high in the United States of nearly $1.04 a liter ($3.94 a gallon).
Some information for this report was provided by Bloomberg, AP and Reuters.
