Consumers' Confidence in the Economy Falls in March

consumer confidence march falls
Gene J. Puskar/AP The Conference Board said Tuesday its reading of consumer confidence fell in March after rebounding last month.
Americans are less confident in the economy than they were last month as massive government spending cuts have stoked economic uncertainty.

It's just the latest swing in the way Americans feel about the economy. Their views have fluctuated between optimism and angst over the months as they've weighed an advancing stock market and housing recovery against new economic challenges.

The Conference Board, a New York-based private research group, said Tuesday that its Consumer Confidence Index fell in March to 59.7 from a revised reading of 68 in February and the 68.7 that analysts polled by research firm FactSet expected. Confidence is still far off from the 90 reading that indicates a healthy economy.

The index is closely watched by economists because it makes a monthly gauge of how Americans are feeling about their jobs, incomes and other bread-and-butter issues. That's important because consumer spending accounts for 70 percent of U.S. economic activity.

Anxiety about $85 billion in across-the-board government spending cuts that took effect March 1 caused the decline in the index, the group said. The spending reductions, which were triggered after Congress and the White House failed to resolve a budget impasse, have "created uncertainty regarding the economic outlook," Lynn Franco, the Conference Board's director of economic indicators, said in a statement

Congress and the Obama administration reached a deal on Jan. 1 to prevent income taxes from rising on most Americans. But they allowed a temporary cut in Social Security taxes to expire. For a worker earning $50,000 a year, take-home pay will shrink by about $1,000.

The Conference Board's survey was conducted from March 1 through March 14. The sharp decline in the March index was caused mainly by a drop in expectations for the economy, though consumers also were more pessimistic regarding current economic conditions, the group said. The number of people anticipating more jobs in the months ahead fell to 12.3 percent from 16.1 percent, while those expecting their incomes to increase slipped to 13.7 percent from 15.8 percent.

Consumers also are again pessimistic about the short-term outlook for the economy, the group said. The proportion of people expecting business conditions to improve over the next six months fell to 14.4 percent from 18 percent a month earlier, while those expecting conditions to worsen rose to 18.3 percent from 16.6 percent.

The index comes as Americans are seeing some signs of an improving economy.

Stock prices have roughly doubled since June 2009. And the job market, while still tough, is rebounding. Employers added 236,000 jobs in February, driving the unemployment rate down to 7.7 percent, its lowest level in more than four years. The gains signaled that companies are confident enough in the economy to intensify hiring even in the face of tax increases and government spending cuts.

Americans spent more at retailers in February despite the smaller paychecks, according to a Commerce Department report issued on March 13. Much of the increase in retail sales compared with January reflected higher gasoline prices. But even excluding the volatile categories of gas, autos and building supply stores, so-called core retail sales rose strongly.

The healthier-than-expected numbers prompted some experts to revise their estimates of U.S. economic growth for the January-March quarter. And the Conference Board's measure of the U.S. economy's health over the next six months, reported on Thursday, increased in February from January.

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and the runaway train is speeding up!

March 27 2013 at 9:01 AM Report abuse rate up rate down Reply

"Confidence"? in Obama socialism? Are you smarter than a sixth grader? Sadly, many are of kindergarten, "wisdom" at best.

March 27 2013 at 12:43 AM Report abuse rate up rate down Reply

It's funny to watch the lemmings claim how happy they are with the "recovery!!!" (Cough, cough...)

If a republican were President, we would hear nothing but howls about what a crap economy it is, how there is NO RECOVERY, and that people are starving and homeless.

If democrats treated ALL POLITICIANS the way they treat republicans, we could acutally have good government. Then again, maybe they are being herded by the press. They are the cheerleaders for that SILLY CULT!!!!!

March 26 2013 at 8:07 PM Report abuse rate up rate down Reply

so how the hell can WE have a so called healthy economy with the inflation rates etc CONTINUING nonstop ? they don't need to PULL THE SAME BS as they did in cyprus--just KEEP PRINTING MONEY AND DEVALUING IT.

March 26 2013 at 3:11 PM Report abuse +2 rate up rate down Reply

Consumer confidence up?? Not since 2007, forget 2008, and the rest has been all downhill. Never been so disappointed by our politicans. Clueless in DC!!

March 26 2013 at 1:55 PM Report abuse +4 rate up rate down Reply

The tax on Social Security that was just reinstated, should have never been implemented in the first place. Social Security was in enough trouble and Obama lowering the tax did not help.

March 26 2013 at 1:16 PM Report abuse +1 rate up rate down Reply