Worries about rising prices, flat income account for decline
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — Consumer confidence experienced its biggest decline in more than a year, falling sharply in March because of growing concerns about rising prices and stagnant incomes, according to a survey released Tuesday.
The nonprofit Conference Board said its consumer-confidence index dropped to 63.4 in March from a revised 72.0 in February, marking the biggest one-month decline since February 2010.
Economists polled by MarketWatch had expected the index to decline to 62.2 from February’s initially reported level of 70.4.
The rising prices of gas and food are among consumers’ biggest concerns. Several other reports on the outlook of consumers have also shown sharp declines in March.
Lynn Franco, an economist with the Conference Board, said the retreat in consumer confidence “will likely impact spending decisions.” Because consumers account for about two-thirds of U.S. growth, any significant drop in spending could weaken an already-fragile economy.
The biggest decline occurred in the board’s “expectations” index, which gauges how consumers feel about the next 12 months. That index fell to 81.1 in March from 97.5 in February.
The “present situation” index, however, rose to 36.9 from 33.8 in February, indicating that consumers feel somewhat better about the current state of the U.S. economy.
Franco said the higher reading suggests the economy continues to expand.
