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Consumer confidence falls; pressures mount
Daily Herald News Services
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Published: 2/27/2008 12:16 AM

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NEW YORK -- U.S. consumer confidence fell to a five-year low in February in a tightening jobs market, a new survey showed, fueling fears the economy was already in recession.

The Conference Board said Tuesday its index of consumer sentiment fell to 75.0 in February from a downwardly revised 87.3 in January, originally reported as 87.9.

The median forecast of 67 economists polled by Reuters was for a reading of 82.0.

In addition, consumers don't think things will get better soon. The board's expectations index fell to 57.9 -- its lowest in 17 years -- from a downwardly revised 69.3.

The deterioration in sentiment was pronounced.

It was the biggest monthly drop in the consumer confidence and expectations indexes since September 2005, following Hurricane Katrina.

The consumers confidence index led several bleak economic reports released Tuesday. In addition, a national home price index revealed the collapse in U.S. home prices accelerated to a record pace in the fourth quarter of 2007, with prices plunging 8.9 percent for the entire year.

The quarterly drop in prices of existing single-family homes quickened to 5.4 percent in the final three months of 2007 from a 1.8 percent drop in the third quarter, according to the S&P/Case-Shiller U.S. National Home Price Index, Standard & Poor's said in a statement.

The 8.9 percent year-over-year decline was the largest in the 20-year history of the index, as housing was pressured lower by a huge supply of homes for sale, rising foreclosures and tighter lending conditions.

In a sign that rising gasoline prices may continue to pressure families, oil futures surged to a new closing record above $100 Tuesday as traders sought a safe haven against a dollar that is coming under increasing pressure from the shaky U.S. economy.

The greenback tumbled at one point to its lowest level ever against the euro, helping drive more money into energy futures. Supply concerns and a bullish attitude among stock traders also helped keep oil prices high.

"You're seeing more of a switch into commodity prices as a hedge against inflation," said Adam Hewison, president of INO.com, a financial Web site that specializes in futures trading.

Light, sweet crude for April delivery jumped $1.65 to settle at $100.88 a barrel on the New York Mercantile Exchange. At one point in the session, prices surged as high as $101.15.