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US Consumer Confidence Dips 7 Points - 2004-08-31

Continuing worries about the U.S. labor market eroded Consumer Confidence in August.

The private business research organization, the Conference Board, says that its monthly Consumer Confidence index dipped seven points in August, dropping from 105.7 in July to 98.2.

Lynn Franco, the group's director of Consumer Research, attributes the sliding confidence index to consumer caution.

"What this is telling us is that an air of caution has once again returned," explained Ms. Franco. "Labor markets, that is really the key. We saw strong growth in the labor market earlier this summer, actually in the spring, and that helped fuel confidence. Now that we have seen some tepid growth, it has taken a bite out of confidence."

Ms. Franco says labor market volatility is raising concerns about overall business conditions as American consumers wait for a period of sustained growth.

"In terms of the overall picture, when we asked them about business conditions, we see there too that they are telling us too that conditions are a little softer in August than they were in July," she adds. "Looking ahead, they do not expect a big pick up in activity. They do not expect a plummet either, but kind of more of the same."

The Conference Board bases the Consumer Confidence Index on a monthly survey of about 3500 households.