Consumer confidence: Credit and housing woes spur a slide.

NEW YORK - Consumer confidence weakened in August as Americans focused on turbulent financial markets, a decline in home prices, and tighter credit standards.

The Conference Board, a New York business research group, said yesterday that its Consumer Confidence Index had declined to 105.0 from a revised reading of 111.9 in July. The July figure still was a six-year high.

Also, while the index was down, it was slightly stronger than the 104.5 that Wall Street analysts had expected.

"A softening in business conditions and labor-market conditions has curbed consumers' confidence this month," said Lynn Franco, director of the Conference Board Consumer Research Center. "In addition, the volatility in financial markets and continued subprime-housing woes may have played a role in dampening consumers' spirits." Subprime refers to mortgage loans made to borrowers with shaky credit histories.

The board's survey is closely watched because consumer spending represents two-thirds of the U.S. economy and because confidence levels tend to influence spending.

"It was down, but that was widely expected with what's going on with housing," said Richard Huber, an economist with A.G. Edwards & Sons Inc., of St. Louis. "That's weighing on consumers."

The board's Present Situation Index, which measures how shoppers feel now about economic conditions, decreased to 130.3 in August from 138.3 in July.

The Expectations Index, which measures shoppers' outlook for the next six months, fell to 88.2 from 94.4.

Consumers' assessment of the labor market weakened slightly. Those saying jobs were "hard to get" increased to 19.7 percent in August from 18.7 percent. Those saying jobs were plentiful fell to 27.5 percent from 30.0 percent in July, and those saying jobs were not so plentiful rose to 52.8 percent from 51.3 percent.

The Consumer Confidence Survey from the Conference Board is based on a representative sample of 5,000 U.S. households to measure consumer sentiment on present economic conditions and the spending outlook for the next six months. The index was based at 100 in 1985.

So far, a strong economic picture, outside the housing problems, is keeping many economists upbeat about spending trends. U.S. consumers are in the midst of the back-to-school shopping season and soon will gear up for holiday shopping in November and December.

"We have certainly pulled back consumer-spending expectations in the third and fourth quarters," said Adam York, an economic analyst at Wachovia Corp. in Charlotte, N.C.

"We don't expect a disastrous holiday season by any means, but we expect a moderation by some degree."

Consumer-confidence figures for the Pennsylvania-New Jersey-New York area*

Index           July August

Overall        99.182.8

Present

Situation        126.0116.7

Expectations** 81.160.2

*U.S. average, 1985 = 100

**For six months from now

SOURCE: The Conference Board

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