U.S. Consumer Confidence Plummets

Confidence is at lowest level since 2003

U.S. consumers lost further confidence in their economic wellbeing this month, according to a Conference Board survey released Feb. 26. Confidence has slumped to its lowest level since the US-led invasion of Iraq in 2003. The Conference Board consumer confidence index dived to a reading of 75.0 in February, compared with 87.3 in January. The index had also fallen in January.

The survey showed the confidence of American consumers had slumped to its lowest level since November 1993, with the exception of polling conducted as U.S .forces toppled the government of former Iraqi dictator Saddam Hussein five years ago.

"With so few consumers expecting conditions to turnaround in the months ahead, the outlook for the economy continues to worsen and the risk of a recession continues to increase," said Lynn Franco, a director of the Conference Board's consumer research center.

Economists monitor consumer confidence closely because consumer spending accounts for the lion's share, or around two-thirds, of all U.S. economic growth. The monthly report canvasses the sentiments of 5,000 American households, quizzing them on a range of questions tied to economic wellbeing.

The Conference Board's latest survey showed consumers are becoming more concerned about their economic prospects. "Consumers' expectations have also deteriorated significantly and are now at a seventeen-year low," Franco said, referring to a separate gauge in the survey which also showed a marked decline.

Copyright Agence France-Presse, 2008

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