Confidence falls in the US and Europe

The story from Tuesday's economic reports is that confidence is declining in both the US and Europe.

In the US, consumer confidence fell to the lowest since 2009 in August. Bloomberg reports:

The Conference Board’s index slumped to 44.5, the weakest since April 2009, from a revised 59.2 reading in July, figures from the New York-based research group showed today. It was the biggest point drop since October 2008. A separate report showed home prices declined for a ninth month.

The fall in the Conference Board's confidence index is in line with the fall in the Thomson Reuters/University of Michigan consumer sentiment index, which, as I mentioned on Monday, is similar to that in past recessions.

In Europe, the European Commission reports that the Economic Sentiment Indicator declined by 5.0 points to 97.3 in the EU and by 4.7 points to 98.3 in the euro area.

Forecasts for economic growth in the euro area are looking weak. From Reuters:

Economists said the euro zone economy may grow only 0.1 percent in the third quarter and come to a halt in the fourth.

"The (economic sentiment) index is now consistent with annual GDP growth of about 0.7 percent, implying that activity could fall outright in Q3 compared to Q2," said Jennifer McKeown, economist at Capital Economics.