US consumer prices fall in June

15 July 2011 Last updated at 14:35 GMT US drivers still experience fuel price shock The cost of living in the United States fell in June, as a sharp drop in energy cost offset other price rises.

Consumer prices fell 0.2%, their first monthly fall in a year; excluding energy and food, prices rose slightly. The annual inflation rate was 3.6%.

However, a survey of consumer confidence suggests US shoppers are feeling increasingly pessimistic.

Worries about falling incomes and rising unemployment pushed confidence to its lowest since March 2009.

According to the Thomson Reuters / University of Michigan survey, the measures of both the current economic conditions and consumer expectations dropped to their lowest since 2009.

Separately, a much-watched gauge of manufacturing activity in the state of New York showed a contraction for the second month in a row, a worse than expected performance.

Earlier this week, the chairman of the US central bank, Ben Bernanke, had said that recent price rising would probably be temporary, because of rising unemployment and slow growth.

However, the rise in core inflation - which excludes the cost of energy and food - was the biggest monthly gain in three years and some Wall Street analysts continue to believe that inflationary pressures are building.

"The world is no longer deflationary, and you're seeing that in spades in core commodities," said Eric Green, chief economist at TD Securities in New York. "We are getting a very, very sharp rebound in core inflation and much more than the Fed bargained for."

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US consumer confidence down again

28 June 2011 Last updated at 20:46 GMT The jobs and property markets remain weak and consumers face higher energy bills US consumer confidence fell in June to the lowest point since November 2010 on concerns about unemployment and stagnating wages.

The closely-watched Conference Board's Consumer Index fell to 58.5 from a revised 61.7 in May.

A reading of 90 or above indicates a healthy economy on the index, which measures consumers' attitudes to jobs and spending in the short term.

Consumer spending accounts for 70% of US economic activity.

"Given the combination of uneasiness about the economic outlook and future earnings, consumers are likely to continue weighing their spending decisions quite carefully," said Lynn Franco, director of The Conference Board Consumer Research Center.

In February the index reached a three-year high of 72, but it has fallen back amid concern that the US recovery has run out of steam.

The jobs and property markets remain weak, and consumers were hit with rising energy prices.

Official figures released on Monday reported that consumer spending was unchanged in May compared with April, marking the first time in a year that spending has not increased from the previous month.

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Increase in US consumer spending

27 May 2011 Last updated at 13:45 GMT Rising food prices have driven up spending US consumer spending rose in April, official figures show, but the increase was less than expected.

The US Commerce Department figures showed spending up by 0.4% in April, the 10th month in a row it has risen.

But the rise was less than the downwardly-revised 0.5% increase seen in March. Analysts had expected the same figure for April.

The data suggests that much of the increased spending may have gone on higher food and energy costs.

Incomes flat

High food and energy prices were behind a rise of 0.3% in overall prices last month, according to the Personal Consumption Expenditures index.

The data suggests much of the increase in spending went on food and fuel. Spending adjusted for inflation was nearly flat, up by just 0.1%.

Incomes rose 0.4% in April, the Commerce Department said, but disposable incomes adjusted for inflation also showed no rise.

Analysts suggest a recent drop in the price of oil may allow an increase in spending on other items.

Consumer spending is a crucial part of the US economy and accounts for about 70% of economic activity.

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Clarity call for consumer privacy

24 May 2011 Last updated at 12:21 GMT Computers and mobile phones have made distance shopping easier Businesses should be clearer about how they plan to share customers' personal data with other companies, a consumer body has said.

The growth in online transactions has allowed more businesses to collect information such as credit card details and shopping preferences.

The Communications Consumer Panel said that people should have control over which information is shared.

Such details should not be buried in the small print, the panel said.

"Companies should be able to explain how they protect people's privacy in a straightforward way that makes sense to consumers," said the panel's acting chairman, Bob Warner.

Data doubts

Consumers using their mobile phones can allow businesses to collect data about their location and the products and services they are interested in.

Some data can also be sold on to third parties to target the consumer with offers.

Mr Warner said that a lack of confidence in how private information was handled could curtail the development of new technology.

The panel, which was set up to advise communications regulator Ofcom about consumers' interests, wants more control for shoppers over their data.

It also called for more reassurance that companies were minimising the amount of data they collected and keeping it for no longer than was necessary.

Earlier this year, the Information Commissioner raised concerns over people's awareness of data privacy.

"It has never been more important to protect your personal information. Whether you are surfing the net, shopping online or signing up to social networking sites, it is crucial that people are thinking about how their information might be used," said Christopher Graham, the Information Commissioner.

"From employers looking up potential employees on Facebook to cyber-criminals hacking into unsecured wi-fi networks, not protecting your personal information can cause serious harm and distress."

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Japan consumer mood falls sharply

16 May 2011 Last updated at 05:38 GMT Japan's economy needs deregulation in order to create new jobs, says Richard Jerram of Macquarie Securities

The mood of consumers in Japan deteriorated further in April, a survey has found, as the fallout from the devastating earthquake and tsunami continued to weigh on sentiment.

The consumer confidence index fell to 33.1, down from 38.6 in March, according to the Cabinet Office.

A reading below 50 suggests consumer pessimism.

However, analysts say that there are signs that confidence is beginning to recover.

'Bounce' hopes

Even people in parts of Japan not affected by the 11 March earthquake and tsunami, like Tokyo and western Japan, have been cutting back on spending.

"People refrained from spending money on going to amusement parks or drinking and eating to respect those living in disaster areas," said Masaki Kaano, chief economist at JP Morgan Securities.

However, analysts say consumer confidence was on the rise at the end of April, and could recover next month.

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If the government doesn't manage the nuclear power plant issue well and if there is bad news from there, people's sentiment may turn bad”

End Quote Masaki Kaano JP Morgan Securities "There is no massive downward trend and there are signals of a bounce," said Naomi Fink, Japan strategist at Jefferies in Tokyo.

"We're not going to see several consecutive courses of deterioration."

Spending is likely to rebound, as consumers' concerns are not centred around job security - as they were in the aftermath of the global economic crisis in 2008, said Ms Fink.

Energy squeeze

There are signs that consumer mood was already recovering at the end of April, which coincided with the start of a week-long holiday in Japan called Golden Week.

Another factor lifting spirits has been the end of the Buddhist mourning period.

In Buddhism during the first seven weeks, or 49 days after a death, families and close friends are expected to refrain from entertainment.

The 49th day after the disaster was on 28 April, which means many people were only in the mood to spend after that.

The 9.0 magnitude earthquake and subsequent tsunami killed more than 15,000 people, according to the national policy agency.

"Consumer sentiment changed positively when Golden Week started, and that uptrend remains unchanged into May," said Mr Kaano.

But while analysts are optimistic, there are still some potential risks on the horizon that could affect consumers' likelihood to spend.

Businesses have been asked to cut back on electricity usage by 15% during the summer, when power consumption is at its peak.

Businesses in Tokyo experienced rolling blackouts in the week following the earthquake

Even worse, the nuclear crisis continues to weigh on sentiment.

Work at the Fukushima Daiichi plant was hit with another setback last week after a water leak was found in one of the reactors.

Tokyo Electric Power, the utility that runs the power plant, has said it hopes to stabilise the reactors by January.

Some experts think that a delay in that schedule is now likely.

"If the government doesn't manage the nuclear power plant issue well and if there is bad news from there, people's sentiment may turn bad," said Mr Kaano.

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