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(Rapaport...August 26, 2005) The price of gasoline is weighing heavily upon consumers in the United States. The New York Times on August 25 reported that the average gasoline price increase so far in 2005 equates to $900 per family per year, which outpaced the growth of personal income. But oil prices show no immediate signs of falling yet, which weighed on consumer confidence for a second consecutive month.
The monthly survey of consumer confidence fell to 89.1 in August, according to the University of Michigan's monthly index. The index was 96.1 in July, and the drop in August twice as steep as economists predicted.
The average price of gasoline nationwide stood at $2.61 per gallon on August 24, with California --traditionally with the highest rates-- exceeding $3 per gallon in many cities.
Current conditions index for consumers fell more than expected to 108.2, from 113.5 in July, and the long-term expectations dropped to 76.9 from 85.5 in July.
Gasoline prices have risen 48 percent in 2005. The International Council of Shopping Centers have revised retail spending down by 2 percent to 4 percent for August due to gasoline inflation.
Wal-Mart Stores Inc., the largest retailer in the United States, dropped its forecasts for August sales by 2 percent to a 3 percent increase after a 4.4 percent increase in July.
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