Consumer Confidence Plummets

Weaker business and labor market conditions in August drove down consumer confidence by the sharpest decline since Hurricane Katrina, the Conference Board reported Tuesday.

Based on a survey of 5,000 households nationwide, the New York-based private research group's consumer confidence index dropped to 105 from 111.9 in July.

Both the present situation and expectations components of the index declined in August, driven by a less favorable assessment of current labor market conditions, as well as for the months ahead.

"The volatility in financial markets and continued subprime housing woes may have played a role in dampening consumers' spirits," Lynn Franco, the group's consumer research director, said in a statement.

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