Industry News

Widening income gap to wreak havoc on consumer confidence

Home-buying plans fall to 15-year low, survey finds

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Although the overall level of consumer confidence was unchanged in July, it masked a growing divergence between the rich and the poor, according to a survey released today. The Index of Consumer Sentiment was 84.7 in the July 2006 survey, nearly identical with the 84.9 in June, but well below the 96.5 recorded in July 2005, according to the University of Michigan's Survey of Consumers. Current economic conditions were judged slightly less favorably, largely due to the impact of gas prices, although both current and expected economic conditions were judged much less favorably than a year ago. "Higher prices have driven a wedge between upper- and lower-income households that now extends well beyond their personal financial situation," according to Richard Curtin, director of the survey. Comparing households in the lower one-third of the income distribution with those in the top third, the difference in the overall measure of consumer sentiment was larger than any time since the early ...