U.S. Consumer Confidence Plunges 10.5 Points

Marks lowest level in 27 years

As Americans grew more pessimistic about current conditions and job, The Conference Board said its consumer confidence index fell to 46 in February from an upwardly revised 56.5 in January.

The reading was much worse than the 55 most analysts had expected and followed three months of improving confidence.

"Concerns about current business conditions and the job market pushed the present situation index down to its lowest level in 27 years," said Lynn Franco, research director at the Conference Board.

The outlook for the next six months also soured, with fewer consumers anticipating an improvement in business conditions and the job market, and consumers remaining "extremely pessimistic" about their income prospects.

"This combination of earnings and job anxieties is likely to continue to curb spending," Franco said.

The Conference Board said its present situation index fell to 19.4 in February from 25.2 the prior month. Those viewing conditions as "good" fell to 6.2% from 8.5%, while those claiming business conditions are "bad" rose to 46.3% from 44.7%.

Consumers also were more pessimistic about the labor market, where the unemployment rate eased to 9.7% in January but is widely expected to remain high for some time as the economy emerges from the worst recession in decades. Respondents saying jobs are "hard to get" rose to 47.7% from 46.5%, while those saying jobs are "plentiful" fell to 3.6% from 4.4%. Job insecurity increased, with those expecting fewer jobs rising to 24.6% from 18.9%.

Consumers anticipating more jobs will become available in the next six months fell to 13.4% from 15.8%.

Consumers' short-term outlook, which had been improving, "lost considerable ground" in February, the research firm noted. The expectations index slid to 63.8 from 77.3 in January.

Consumers anticipating an improvement in business conditions over the next six months dropped to 16.7% from 20.7%, while those expecting them to get worse jumped to 15.3% from 12.7%.

The percentage of consumers anticipating an increase in their incomes dropped to 9.5% from 11%.

Copyright Agence France-Presse, 2010

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish