U.S. consumer confidence fell in March for a second month as Americans grew more pessimistic about
the exonomic outlook because the fewest jobs are being created at this stage of expansion than any recovery since World War II, according to reports.
The University of Michigan’s preliminary index of consumer sentiment declined to 94.1 from 94.4 in February, when confidence fell by the most since the terrorist attacks in September 2001. The survey’s gauge of optimism over the next five months dropped for a second month, and an index of current conditions rose, reports show.
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“Although jobs gains continue, they are rather modest and that’s what is affecting people’s overall sentiment,” said Kevin Logan, a senior market economist at Dresdner Kleinwort Wasserstein in New York, and the top forecaster of consumer spending in a Bloomberg Markets magazine survey last year.
Employers added 21,000 workers in February, a sixth of the median forecast in a Bloomberg News economist survey. The weak job market hasn’t hurt spending, though. Businesses reported a sales rise of 0.4 percent in January, keeping stockpiles lean, according to the Commerce Department. Inventories rose 0.1 percent, less than expected. Overall retail sales rose 0.6 percent in February, the
Commerce Department reports.
The Commerce Department also reported that the U.S. current account deficit narrowed in the fourth quarter to $127.5 billion as income rose from American investments abroad. The three-percent decline in the dollar against a basket of six currencies during the quarter may have contributed, when overseas profits were translated from local currencies, Bloomber reports.
The U.S. has lost 2.3 million jobs in three years, fueling Democratic challenger John F. Kerry’s argument that President George W. Bush hasn’t done enough to spur employment. Bush proposes that Congress can help by making permanent the $1.7 billion in tax cuts he won last year.
The Federal Reserve is expected to keep its benchmark
interest rate at 1 percent next week, the lowest since 1958, in an effort to help lift employment, Bloomberg reports.
Bloomberg News
