by Vicki M. Young with contributions from Arnold J. Karr
Posted Tuesday March 29, 2011
From WWD.COM
Consumer confidence fell in March after five months of steady improvement as expectations for the next half-year declined amid growing anxiety about inflation and persistent concerns about the job market.
The Conference Board's Consumer Confidence Index fell to a three-month low of 63.4 from 72 in February. The Present Situation component rose to 36.9 from 33.8 last month, but the Expectations Index dropped to 81.1 from 97.5.
Brian Jones, economist at Societe Generale, said the weakness was concentrated in expectations of future business activity, employment conditions and incomes. The Expectations Index, which he said accounts for three-fifths of the overall Index, fell to its lowest reading since November, when it stood at 79.9.
Lynn Franco, director of The Conference Board’s Consumer Research Center, said, “Consumers’ inflation expectations rose significantly in March and their income expectations soured, a combination that will likely impact spending decisions. On the other hand, consumers’ assessment of current conditions improved, indicating that while the short-term future may be uncertain, the economy continues to expand.”
Consumers were more downbeat about employment prospects, with those expecting fewer jobs in the months ahead rising to 20.7 percent from 15 percent. And their short-term outlook was also less favorable than in February, with the proportion of consumers who expect business conditions to improve over the next six months declining to 20.6 percent from 25.2 percent. Those who expect business conditions to worsen rose to 16.2 percent from 10.3 percent last month.
The results come at the end of a tempestuous month marked by the earthquake, tsunami and nuclear crisis in Japan, as well as widespread political unrest in North Africa and the Middle East.
