Hurricane Katrina and high oil prices rocked U.S. consumer confidence levels in September. The U.S. Conference Board said today that its index of consumer confidence for September slid to 86.6 from a revised 105.5 in August.

The September reading, which was to the lowest in nearly two years, was well below the 93.0 consensus expectation of economists from a survey conducted by Dow Jones Newswires.

The Conference Board said a the bulk of the drop to hurricane Katrina, which battered the U.S. Gulf Coast, claimed more than a thousands lives, caused widespread property damage, and hindered oil production and refining in that region.

It also cited soaring gasoline prices, which were partly due to Katrina, and a less-optimistic job outlook.

Those factors “created a degree of uncertainty and concern about the short-term future,” said Lynn Franco, director of the Conference Board’s Consumer Research Center, in a news release. She said that typically, such big events have had only short-term effects on consumer confidence. “As rebuilding efforts take hold and job growth gains momentum, consumer confidence should rebound and return to more positive levels by year-end or early 2006,” she added.

Today’s report showed widespread deterioration in consumers’ attitudes. An index measuring feelings about the present economic situation dropped to 108.9 from 123.8, while an index of expectations fell to 71.7 from 93.3. The number of consumers claiming business conditions are “good” declined to 25.2% from 29.7%. Those who say conditions are “bad” increased to 17.7% from 15.1%. Consumers who say jobs are “hard to get” increased to 25.4% from 23.1%, while those claiming they are “plentiful” fell to 20.1% from 23.6%.

Meanwhile, new-home sales pulled back during August after three straight increases, sliding 9.9% to a seasonally adjusted annual rate of 1.237 million, the U.S. Commerce Department said today.

July sales rose 5.3% to an annual rate to 1.373 million, a figure revised down from an earlier estimated record of 1.410 million. Demand also climbed in May and June.

The report showed new-home sales tumbled 22.0% in the Northeast, 10.6% in the Midwest, 2.2% in the South and 17.9% in the West.

Prices, meanwhile, continued to march up. The average price of a new home rose to US$283,400, up from a revised US$280,000 in July. The median price was US$220,300, higher than the revised US$215,000 in July.