Consumer Confidence Remains Low

The March consumer confidence index slipped marginally lower to 62.5, according to The Conference Board's monthly survey, released on Tuesday.

This is about a third below the average level in the 12 months ending in January. It is at about the level that it was in early 1993 at the beginning of the long business expansion, and well above the low point reached in previous recessions, said Jim Haughey, senior economist for Newport Communications.
"While the assessment of current economic conditions has declined in the last two months, the big change has been the sharp decline in expectations for the future," Haughey said. "This is a major threat to economic growth for the rest of the year. But to the extent that failing confidence is due to concern prior to the start of the war with Iraq, it is reversible quickly if the war is short and decisive. On Day Six, this appears to be happening. If so, confidence, consumer spending and freight will rebound by the end of the spring after a few flat or down months."
The quickest way to see changes in confidence in this volatile situation is in the movements of stock indexes and the weekly unemployment reports, Haughey added.