U.S. consumer mood sours, home price growth stalls

NEW YORK (Reuters) - U.S. consumer confidence took its biggest tumble in four years in July on a less upbeat jobs outlook, while home appreciation in major cities stalled in May, suggesting a spring pause in housing demand.

The disappointing data comes as Federal Reserve policymakers meet to consider whether the U.S. economy is strong enough to warrant an end to the Fed's near zero interest rate policy, perhaps as soon as September.

The Federal Open Market Committee, the U.S. central bank's policy-setting group, is meeting on Tuesday and Wednesday.

The Conference Board, an industry group, said on Tuesday its index of consumer attitudes fell to 90.9 this month from a downwardly revised 99.8 in June. It fell far short of a forecast reading of 100.0.

The latest figure was the lowest since September 2014, while the decline was the steepest since August 2011. The report's jobs hard-to-get index rose to 26.7 from June's upwardly adjusted 26.1.

Ryan Sweet, senior economist at Moody's Analytics in West Chester, Pennsylvania, said the slump in confidence likely reflected recent upheavals in the global economy.

"This seems to be an aberration," he said. "Consumers were probably freaked out by the problems in Greece and the Chinese stock market, and the volatility on Wall Street."

Wall Street stock prices and the dollar briefly pared gains on the disappointing consumer confidence data, while U.S. Treasuries prices held losses. [.N] [FRX/] [US/]

Meanwhile, the S&P/Case Shiller composite home price index of 20 metropolitan areas in May rose 4.9 percent year over year, matching the pace in April. Economists polled by Reuters had s projected a stronger 5.6 percent increase.

"As home prices continue rising, they are sending more upbeat signals than other housing market indicators,? David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement.

He blamed first-time homebuyers as "the weak spot" for the price plateau.

Analysts said other indicators showed ongoing improvement in the housing and job sectors, which would allow the FOMC to consider normalizing interest rate from the emergency low level it adopted in December 2008 during the global financial crisis.

"As long as the general tone of the data shows improvement and inflation is moving toward its 2 percent target, they will feel comfortable to raise rates in September," Moody's Sweet said.

(Additional reporting by Chuck Mikolajczak; Editing by Meredith Mazzilli)

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