Sept. 16 (Bloomberg) -- U.S. consumer confidence fell to the lowest since 1992 after Hurricane Katrina devastated the Gulf Coast and pushed gasoline prices to a record high.

The University of Michigan's preliminary index of consumer sentiment fell to 76.9 from 89.1 in August. The reading compares with the median forecast of 85 in a Bloomberg News survey of 53 economists.

``People are understandably more concerned about economic conditions because of the hurricane and the spike in energy prices,'' Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut, said in an interview before the report. ``We'll see weakness in September consumer spending, but things will start to turn around in the fall.''

Katrina hit Aug. 29, causing an estimated $100 billion in damage across 90,000 square miles. It killed hundreds, displaced hundreds of thousands and shuttered hundreds of workplaces. The storm shut vital oil and gas production and refining facilities, pushing gasoline prices to more than $3 a gallon. High gas prices are hurting sales at retailers such as Wal-Mart Stores Inc. and Best Buy Co.

Economists' estimates for the Michigan report ranged from 78 to 90.5. The preliminary reading is based on a phone survey of about 300 households. The university will release a final report with a sample size of 500 on Sept. 30.

The current conditions index, which reflects Americans' perception of their financial situation and whether it's a good time to buy big-ticket items, fell to 97.7 from 108.2 in August. The expectations index, based on optimism about the next one to five years, fell to 63.6 from 76.9 last month.

Jobs Lost

Hurricane Katrina may cost the economy 400,000 lost jobs and cut economic growth by a percentage point in the second half of the year, according to the Congressional Budget Office. The storm helped push initial claims for unemployment benefits up by 71,000 last week, the most in more than nine years, the Labor Department said yesterday.

The federal government has approved $62.3 billion in aid for the region, and reconstruction of the affected areas in Louisiana, Alabama and Mississippi will eventually generate job growth, economists said.

Other recent surveys have shown damage to consumer confidence because of the story.

The IBD/TIPP Economic Optimism Index fell 9.7 points to 41.2 in September, the lowest level since the survey began in February 2001. Investor's Business Daily and the TIPP unit of TechnoMetrica Market Intelligence produce the index.

The ABC News/Washington Post consumer confidence index dropped to -20 in the week ending Sept. 11, the lowest since June 2004. The weekly index was reported at -12 before the storm hit. A reading below zero means the number of negative responses is greater than the number of positive responses.

Wal-Mart, the world's largest retailer, forecast a sales gain of 2 percent to 4 percent in the five weeks that began Aug. 27. The company said high gasoline prices are cutting into sales.

``Where you have your slowness is in the things that people don't have to have,'' Wal-Mart Chief Executive H. Lee Scott said at a meeting with analysts in Boston on Sept. 7. ``With higher fuel prices, we are seeing an increasing difference between the first of the month and the end of the month,'' with spending winding down as the month goes along.

Richfield, Minnesota-based Best Buy, the biggest U.S. electronics retailer, said shaved a percentage point from its forecast for same-store sales gains this year Sept. 13, saying high gasoline prices' effect on consumer spending are a concern.

U.S. retail sales fell 2.1 percent in August, the most since November 2001, as auto purchases slumped, the Commerce Department said yesterday. Excluding autos, sales rose 1 percent, twice as much as expected.

Economists cut third-quarter economic growth forecasts after the hurricane. The economy will expand 3.6 percent at an annual rate in the July-September period, according to the median of 57 estimates in a Bloomberg survey conducted Aug. 31 to Sept. 8. A month earlier, economists predicted 4.1 percent growth.

The storm has also dented President George W. Bush's public approval ratings according to a New York Times/CBS poll published yesterday. Forty-one percent of Americans questioned approved of the Bush's job performance, the lowest rating of his presidency. Forty-eight percent said they disapprove of his response to the needs of the storm's victims. The poll of 1,167 adults was conducted Sept. 9-13 and has an error margin of 3 percentage points.

To contact the reporter on this story: Andrew Ward in New York at award1@bloomberg.net.

Last Updated: September 16, 2005 09:50 EDT