BLBG: Consumer Sentiment in U.S. Probably Declined for Second Month
By Courtney Schlisserman
March 26 (Bloomberg) -- Confidence among U.S. consumers probably fell in March for a second month, indicating lingering concerns about the labor market will weigh on the recovery, economists said before reports today.
The Reuters/University of Michigan final consumer sentiment index for this month fell to 73 from 73.6 in February, according to the median of 64 projections in a Bloomberg News survey. The preliminary reading for the measure, released March 12, was 72.5.
Gains in consumer spending, which accounts for about 70 percent of the economy, may be limited until employers begin to hire. The economy, boosted by business investment and inventories, probably grew at the fastest pace in more than six years in the fourth quarter, economists forecast a separate report to show today.
There are “still a lot of worries about jobs, a lot of pessimism still about the economic outlook in general,” said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Florida. “We don’t expect to see a sharp rise in consumer spending until we really start to get the job growth.”
Consumer spending probably will grow 2.1 percent this year, slower than the 3.3 percent average of the 20 years preceding the start of the recession in December 2007, according to a Bloomberg survey of economists taken earlier this month.
The Reuters/University of Michigan report is scheduled for release at about 9:55 a.m. Economists’ forecasts in the Bloomberg survey ranged from 71 to 75.
The economy expanded at a 5.9 percent annual rate in the final three months of 2009, according to the median estimate of economists surveyed before revised figures on gross domestic product from the Commerce Department are released at 8:30 a.m. Consumer spending may have increased at a 1.7 percent pace.
Stocks, Claims
Higher stock prices and a decline in jobless claims may have boosted the consumer sentiment index from its preliminary reading. The Standard & Poor’s 500 Index has increased 5.5 percent since the end of February and 1.4 percent since the preliminary Reuters/University of Michigan index was released.
Initial jobless claims declined in three of the past four weeks. While employers have slowed the pace of job cuts, they’ve been tentative about hiring, restraining incomes.
Federal Reserve Chairman Ben S. Bernanke, citing “weak” labor and housing markets, said yesterday the world’s largest economy still needs low interest rates to spur growth.
Bernanke and his fellow central bankers last week signaled the U.S. recovery isn’t strong enough to stoke inflation or reduce unemployment quickly.
Fed on Employment
While the economy has “continued to strengthen,” Fed policy makers said in a statement after their March 16 meeting, “employers remain reluctant to add to payrolls.”
Home Depot Inc., the largest U.S. home-improvement retailer, has cut prices on flowers and shrubs, fertilizer, lawn equipment and outdoor furniture to help meet its goal of increasing annual sales for the first time in five years.
“Things are still difficult out there for customers,” Craig Menear, executive vice president of merchandising, said in an interview on March 18.
Bloomberg Survey
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GDP Personal GDP U of Mich
Annual Consump. Prices Conf.
QOQ% QOQ% QOQ% Index
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Date of Release 03/26 03/26 03/26 03/26
Observation Period 4Q F 4Q F 4Q F March F
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Median 5.9% 1.7% 0.4% 73.0
Average 5.8% 1.7% 0.4% 73.1
High Forecast 6.0% 1.7% 0.6% 75.0
Low Forecast 5.5% 1.6% 0.4% 71.0
Number of Participants 76 12 40 64
Previous 5.9% 1.7% 0.4% 72.5
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4CAST Ltd. 5.7% --- 0.4% 74.0
Action Economics 5.7% --- 0.4% 72.5
Aletti Gestielle SGR 5.8% 1.7% 0.4% 72.5
Banesto 5.9% --- --- 72.7
Bank of Tokyo- Mitsubishi 5.6% --- --- 72.3
Bantleon Bank AG 5.9% --- --- 73.5
Barclays Capital 5.7% --- 0.4% 73.0
Bayerische Landesbank 5.9% 1.7% 0.4% 73.0
BBVA 5.9% 1.7% 0.4% 72.5
BMO Capital Markets 5.9% --- 0.4% 73.0
BNP Paribas 5.9% --- 0.6% 73.5
BofA Merrill Lynch Research 5.7% --- 0.4% 73.5
Briefing.com 5.9% --- 0.4% 72.1
C I T I C Securities 5.9% --- --- 72.5
CIBC World Markets 5.9% --- 0.4% ---
Citi 5.7% --- 0.4% 74.0
ClearView Economics 6.0% --- 0.4% 75.0
Commerzbank AG 5.9% --- --- 72.5
Credit Agricole CIB 5.9% --- 0.4% 73.0
Credit Suisse 5.7% --- 0.4% 73.0
Daiwa Securities America --- --- --- 72.5
DekaBank 5.7% --- --- 73.5
Desjardins Group 5.9% --- --- 72.5
Deutsche Bank Securities 5.9% --- 0.4% 73.0
Deutsche Postbank AG 5.9% --- --- 72.5
DZ Bank 5.9% --- 0.4% 72.7
Exane 5.9% --- --- ---
First Trust Advisors 5.7% --- 0.4% 73.0
Fortis 5.9% --- --- ---
FTN Financial 5.7% --- --- 72.0
Goldman, Sachs & Co. 5.9% --- 0.4% ---
Helaba 5.9% --- --- ---
High Frequency Economics 5.9% --- --- 72.5
HSBC Markets 5.8% --- 0.4% 73.0
Ibersecurities 5.9% 1.7% --- 73.2
IDEAglobal 5.8% 1.7% 0.4% 74.0
IHS Global Insight 5.6% --- --- 73.0
Informa Global Markets 5.9% --- 0.4% 74.0
ING Financial Markets 5.9% --- 0.4% 75.0
Insight Economics 5.8% --- 0.4% 73.0
Intesa-SanPaulo 5.9% --- --- 73.5
J.P. Morgan Chase 5.5% 1.6% --- 75.0
Janney Montgomery Scott 5.9% 1.7% 0.4% ---
Jefferies & Co. 5.9% --- 0.4% 74.0
Johnson Illington Advisors 5.9% --- 0.4% 72.5
Landesbank Berlin 5.9% --- --- 72.9
Landesbank BW 5.9% --- --- 72.5
Maria Fiorini Ramirez Inc 5.9% --- 0.4% ---
MF Global 5.7% 1.7% 0.4% 73.5
Mizuho Securities 5.8% --- --- 72.0
Moody’s Economy.com 5.7% --- --- 74.0
Morgan Stanley & Co. 5.7% --- --- ---
Natixis 5.9% --- 0.4% ---
Nomura Securities Intl. 5.9% --- 0.4% ---
PineBridge Investments 5.8% --- --- 74.0
PNC Bank 5.9% --- 0.4% ---
Raiffeisen Zentralbank 5.9% --- 0.4% 72.5
Raymond James 5.9% --- --- 73.0
RBC Capital Markets 5.7% 1.7% --- 74.0
RBS Securities Inc. 5.7% --- 0.4% 72.5
Ried, Thunberg & Co. 5.7% --- --- 73.5
Schneider Foreign Exchange 5.9% --- --- 73.1
Scotia Capital 5.9% --- 0.4% ---
Societe Generale 5.9% --- 0.4% 73.0
Standard Chartered 5.9% --- --- 71.0
State Street Global Markets 5.8% 1.7% 0.4% 74.1
Stone & McCarthy Research 5.8% --- 0.4% 73.2
TD Securities 5.9% --- --- 72.5
Thomson Reuters/IFR 5.8% --- --- 74.0
Tullett Prebon 5.9% --- --- 73.0
UBS 5.6% 1.7% 0.4% 73.0
Union Investment 5.9% --- --- 72.5
University of Maryland 5.9% 1.7% 0.4% 72.5
Wells Fargo & Co. 5.9% --- --- ---
WestLB AG 5.9% --- --- 73.0
Woodley Park Research 6.0% --- --- 73.3
Wrightson Associates 5.7% --- --- 73.5
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To contact the reporter on this story: Courtney Schlisserman in Washington cschlisserma@bloomberg.net
