US budget cuts 'hit consumer sentiment'

Shopper in a supermarket in Chicago
Image caption The report said consumer confidence was weaker

US consumer confidence fell sharply this month, a closely-watched report has suggested.

The Conference Board's index of consumer attitudes fell by 8.3 points to 59.7 in March.

The research group primarily blamed the fall on the US federal budget cuts that came into force at the start of this month.

Separate data on Tuesday from the Commerce Department was more positive, showing a rise in durable goods sales.

Sale of such long-lasting factory products rose by 5.7% in February, the biggest increase in five months.

Yet the Commerce Department also said that sales of new US homes fell in February.

Sale of new residential properties fell to a seasonally adjusted 411,000 in February, 4.6% lower than the 431,000 sold in January, which had been a five-year high.

The government cuts - called the "sequester" cuts - came into force earlier this month. They were due to the federal government running out of funds before a new budget was finally agreed by the US Senate on 20 March.

"This month's retreat was driven primarily by a sharp decline in expectations, although consumers were also more pessimistic in their assessment of current conditions," said Lynn Franco, director of the Conference Board's economic indicators.

"The recent sequester has created uncertainty regarding the economic outlook, and as a result consumers are less confident."

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