U.S. consumers turn grim

By Burton Frierson

NEW YORK (Reuters) - U.S. consumers' confidence plunged to a five-year low this month on worries over rising inflation and fewer jobs, with a record drop in home values in January providing additional cause for their woes, reports showed on Tuesday.

Prices of existing U.S. single-family homes slumped about 11 percent in January from the same month in 2007, according to two closely watched Standard & Poor's/Case-Shiller gauges.

A report by the Conference Board showed consumer expectations for the future were at a 34-year low in March and anxieties over job prospects and inflation at their highest since the aftermath of Hurricane Katrina in late 2005.

The Board said its index of consumer sentiment fell in March to 64.5 -- the lowest since March 2003 -- from an upwardly revised 76.4 in February.

"These are dramatic declines with all the bad news hitting consumers," said Nigel Gault, chief U.S. economist at research consultancy Global Insight in Waltham, Massachusetts. "It's hard to say anything positive for the consumers."

On Wall Street, stocks fell after the reports but were mixed by midday, while the dollar weakened broadly. U.S. government bonds, which usually benefit from signs of economic weakness, posted solid gains.

The median forecast of economists polled by Reuters was for a consumer confidence reading of 73.5 in March. February's index was originally reported at 75.0.

The Conference Board, a private business and research organization, said its expectations index fell to 47.9 -- the lowest since January 1974 -- from an upwardly revised 58.0 in February.