Consumer Confidence fell in March, eroding February’s gains, as Americans grew more pessimistic about the job market, their income and the state of the economy.
“The sharp decline in confidence was prompted by a sharp decline in expectations,” said Lynn Franco, director of The Conference Board Consumer Research Center, which produces the monthly report. “Consumers inflation expectations rose significantly in March and their income expectations soured, a combination that will likely impact spending decisions.”
Personal income figures released yesterday by the Commerce Department showed that real disposable income fell slightly in February, as inflation and tax increases more than offset a slight gain in personal income. Spending rose by 0.3 percent in February, but savings rates declined.
The overall Consumer Confidence Index now stands at 63.4 down from 72.0 in February. The Expectations Index fell to 81.1 in March from 97.5 in February, while attitudes recorded in the Present Situation Index improved to 36.9 in March from 33.8 in February.
“Consumer’s assessment of current conditions improved, indicating that while the short-term future may be uncertain, the economy continues to expand,” Franco said.
Consumers’ were less positive about the job market. Those saying jobs are “hard to get” rose to 44.6 percent in March, from 44.4 percent in February, while those saying jobs are “plentiful” fell to 4.4 percent in March from 4.9 percent in February. The percentage expecting the number of jobs to increase in the next few months fell to 19.9 percent from 21.2 percent, while those expecting the number to shrink rose to 20.7 percent from 15 percent.
The proportion of consumers expecting business to improve over the next six months fell to 20.6 percent from 25.2 percent, while those expecting business conditions to worsen rose from 16.2 percent from 10.3 percent. The proportion of consumers expecting their incomes to rise declined to 15.3 percent from 17.4 percent.