Greenspan-US consumer confidence drop not surprising

biz.yahoo.com Reuters Wednesday February 26, 11:30 am ET

WASHINGTON, Feb 26 (Reuters) - Federal Reserve Chairman Alan Greenspan said on Wednesday a recently reported sharp drop in a consumer confidence index for February was significant but not particularly a surprise.

"So it is a very significant decline but...it is not a particular surprise. The order of magnitude is certainly a surprise but not the correction in that regard," Greenspan told the Senate Banking Committee.

On Tuesday, the Conference Board said its index of consumer confidence for February slumped 15 points to 64, taking the index to its lowest level since October 1993.

Greenspan said gasoline prices, which have soared partly due to geopolitical tensions such as the situation in Iraq and Venezuela, were in part to blame for poor consumer confidence.

"Consumer confidence indexes tend to be affected by events that consumers are acutely aware of such as the dramatic rise in gasoline prices," he said.