Consumer confidence plummets

NEW YORK — Consumer confidence suffered its biggest drop in 15 years in September as Hurricane Katrina made Americans anxious about the rising costs of heating their homes and filling their gas tanks. The decline raised questions about consumer spending for the rest of this year, including the holiday shopping season.

Meanwhile, the government reported Tuesday that new home sales plunged in August by the largest amount in nine months, continuing a string of mixed signals about the health of the housing boom.

The Conference Board said its Consumer Confidence Index, compiled from a survey of U.S. households, dropped 18.9 points to 86.6 from a revised reading of 105.5 in August.

That marked the biggest slide since October 1990, when the index fell 23 points to 62.6 amid the onset of the recession, the buildup to the first Gulf war and a spike in gasoline prices. The September reading was also the lowest level since October 2003, when it registered 81.7.

Analysts had expected the September reading to be 98.

The Commerce Department said new home sales fell 9.9 percent last month to a seasonally adjusted annual rate of 1.24 million units. Even with the slowdown, the median sales price rose 2.5 percent from July’s level to $220,300. The bigger-than-projected drop in new home sales could signal that the nation’s red-hot housing market is starting to slow down.

Republicans were assessing the political impact of the numbers, particularly the drop in consumer confidence, saying it gives them more reason to worry about next year’s elections.

“These are serious numbers,” said Rep. Tom Cole, R-Okla., a political operative-turned-congressman, referring to the consumer confidence figures. “The question is whether this is a trend or a reaction to Katrina and Rita.”

Cole said he suspects the public’s mood will improve by this time next year when Republicans, who control Congress and the White House, will face the judgment of an uneasy electorate. But in the intervening months, he said, the political consequences of consumer anxiety are “real serious.”