The index of consumer confidence fell farther than forecast to its lowest point since November 2005, the Conference Board reported Tuesday. "Weaker business conditions combined with a less favorable job market continue to cast a cloud over consumers and heighten their sense of uncertainty and concern," said Lynn Franco, director of the Conference Board's research center. The index dropped to 99.8 from a revised 105.6 in August, beyond a forecast 104.3. The report suggests the housing slump and tightening of credit are reining in consumer spending, which represents over two-thirds of the economy. "The trend in confidence is downshifting," said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. "It puts pressure on the Fed to ease" interest rates beyond last week's half-percentage point cut in the fed-funds rate. In other news, the National Association of Realtors said U.S. existing home sales fell 4.3% in August to a 5.5 million-unit annual rate, the slowest in five years (full story). Inventories of single-family homes and condos rose 0.4% to a record 10-month supply. "It's the supply that's the real shocker," said Josh Stiles, senior bond strategist at IDEAglobal in New York. "That is just going to be a weight on prices and activity."
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