US Consumer Confidence At 16-Year Low; House Prices Slide (Shobhana Chandra & Timothy R. Homan)

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June 24 (Bloomberg) -- Confidence among Americans dropped to the lowest level in 16 years and house prices fell the most on record, raising the risk that consumers will cut back on purchases after spending their tax rebates.

The Conference Board's confidence index fell to 50.4 in June, lower than forecast, from 57.2 in May. Home prices in 20 cities dropped 15.3 percent in April from a year earlier, according to S&P/Case-Shiller, the most since the group began collecting data.

Consumers, whose spending accounts for more than two thirds of gross domestic product, are being hurt by the housing slump, rising unemployment and higher food and fuel bills.

``We've seen this dive in confidence in the last two months at the same time these stimulus checks'' have been mailed, Chris Low, chief economist at FTN Financial in New York, said in a Bloomberg Television interview. ``It tells me if we see this pop in spending, it's not going to last.''

The confidence measure reached the lowest level since February 1992, when the economy was in the midst of the so- called ``jobless recovery'' following the 1990-1991 contraction.