Consumer confidence fell sharply in March, following February’s uptick, says Lynn Franco, director of economic indicators at The Conference Board. "This month’s retreat was driven primarily by a sharp decline in expectations, although consumers were also more pessimistic in their assessment of current conditions."
"The loss of confidence, particularly expectations, mirrors the losses experienced this past December and January. The recent sequester has created uncertainty regarding the economic outlook and as a result, consumers are less confident," says Franco.
The Conference Board Consumer Confidence Index, which had improved in February, declined in March. The Index now stands at 59.7 (1985=100), down from 68.0 in February. The Present Situation Index decreased to 57.9 from 61.4. The Expectations Index declined to 60.9 from 72.4 last month.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was March 14.
Consumers’ appraisal of current conditions declined in March, the Conference Board says. Those saying business conditions are “good” decreased to 16.0 percent from 17.6 percent, while those stating business conditions are “bad” increased to 29.3 percent from 28.2 percent. Consumers’ assessment of the labor market was mixed. Those claiming jobs are “plentiful” decreased to 9.4 percent from 10.1 percent, but those claiming jobs are “hard to get” edged down to 36.2 percent from 36.9 percent.
Consumers are once again pessimistic about the short-term outlook, according to the report. Those expecting business conditions to improve over the next six months decreased to 14.4 percent from 18.0 percent, while those anticipating business conditions to worsen increased to 18.3 percent from 16.6 percent.
Consumers’ outlook for the labor market was also less favorable, the Conference Board said. Those expecting more jobs in the months ahead declined to 12.3 percent from 16.1 percent, while those expecting fewer jobs increased to 26.6 percent from 22.1 percent. The proportion of consumers expecting their incomes to increase fell to 13.7 percent from 15.8 percent, while those expecting a decrease edged down to 18.0 percent from 19.3 percent.
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