US consumer confidence fell more than forecast in April to its lowest level in 26 years, a sign record gasoline prices and rising unemployment will prompt Americans to curb spending.
The Reuters/University of Michigan index of consumer sentiment decreased to 62.6, the weakest since 1982, from 69.5 the prior month. The measure averaged 85.6 in 2007.
Consumers are growing increasingly anxious as the economy has lost almost a quarter million jobs so far this year, the cost of refuelling a car is up 17 per cent and property values fall.
Sales of big-ticket items such as houses and cars have weakened as a result, contributing to a slowdown in spending that may bring an end to the six-year expansion.
Economists had forecast the consumer sentiment gauge would fall to 63.2 from 69.5 in March, according to the median of 60 projections in a Bloomberg News survey. Estimates ranged from a low of 62 to a high of 72.
The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, dropped to 53.3 from 60.1 last month.
A measure of current conditions, which reflects Americans' perceptions of their financial situation and whether it's a good time to make big ticket purchases like cars, decreased to 77 from 84.2 last month.
Consumers were also more concerned about inflation. Americans thought prices would increase 4.8 per cent over the next 12 months, up from a 4.3 per cent estimate in March.
Longer term, inflation was pegged at 3.2 per cent compared with 2.9 per cent last month.
The economy lost 80,000 jobs in March, the most in five years, following a 76,000 drop in payrolls in each of the prior two months, according to figures from the Labor Department.
The jobless rate rose to 5.1 per cent, the highest level in more than two years. Rising fuel costs have contributed to a drop in auto sales and prompted some shoppers to limit trips to malls.
The average price of regular unleaded gasoline rose to a record $3.58 a gallon yesterday, according to data from AAA.