NEW YORK – Confidence among U.S. consumers fell to a five-year low this month, extending February’s sharp decline, and their outlook for the future fell to the lowest level since 1973, according to a report today fromThe Conference Board.
The board’s Consumer Confidence Index fell 15.6 percent to 64.5 points in March (1985 = 100) from February’s revised level of 76.4 points. (READ MORE)
Analysts had expected the index to fall to 73.5 points from the 75.0 points of the original February report, based on the median forecast from a Bloomberg News survey of 61 economists. The actual reading was gloomier than even the lowest of their estimates, which ranged from 65 to 76 points.
The share of respondents who consider business conditions to be good fell to 15.4 percent from last month’s 19.1 percent while the share saying conditions are bad rose to 25.4 percent from February’s 21.3 percent. The share seeing jobs as plentiful fell to 18.9 percent this month from last month’s 21.5 percent, while the share saying jobs are hard to find rose to 52.1 percent from February’s 23.4 percent.
“Consumers’ confidence in the state of the economy continues to fade, and the Index remains at a five-year low,” compared with the March 2003 level of 61.4 points, Lynn Franco, director of the board’s Consumer Research Center, said in a statement today. “The decline in the Present Situation Index implies that the pace of growth in recent months has weakened even further.
“Looking ahead, consumers’ outlook for business conditions, the job market and their income prospects is quite pessimistic, and suggests further weakening may be on the horizon,” Franco said.
Meanwhile, the board’s gauge of expectations for the economy in the next six months fell to 47.9 points this month from February’s 58.0 points (revised upward from the original 57.9 points) and January’s 69.3 points.
The Expectations Index “is now at a 35-year low,” Franco said: the lowest since the 45.2-point reading of December 1973, when Richard M. Nixon was president and the Watergate scandal rocked a nation already reeling from the Arab oil embargo.
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The share of respondents expecting business conditions to worsen over the next six months increased to 25.4 percent from 21.6 percent, while the share anticipating business conditions to improve fell to 8.1 percent from 9.7 percent in February.
The share expecting their incomes to rise over the next half year fell to 14.9 percent – the lowest in the survey’s history – from February’s 18.0 percent. The share expecting jobs to increase fell to 7.7 percent from last month’s 8.9 percent.
The indexes are based on a monthly survey conducted for the Conference Board by custom research firm TNS. The cutoff date for this month’s preliminary results was March 18.
“It’s a discouraging environment,” Pierre Ellis, a senior economist at Decision Economics Inc. in New York, told Bloomberg Television. “We are almost certainly in a recession. The question is how deep and how long it will be.”
The Conference Board is a nonpartisan, nonprofit business membership and research organization with offices in New York City, Chicago and abroad. Additional information is available at www.Conference-Board.org.
