U.S. March Consumer Confidence Edges Lower-Report
By Daniel Bases
NEW YORK (Reuters) - U.S. consumer confidence (news - web sites) edged lower in March, with Americans surveyed expressing concern about low job creation, a report said on Tuesday.
The Conference Board (news - web sites), a private research firm, said its index of consumer confidence slipped to 88.3 in March from an upwardly revised 88.5 in February. Economists surveyed by Reuters had forecast a drop to 86.5.
However, revisions to February's data put consumer confidence levels above expectations for March, diminishing the negative impact of the reported slight decline in confidence.
"Consumer confidence has improved but remains fragile due primarily to a soft jobs market and the recent rise in gasoline prices. The volatility in the stock market is also weighing on consumers' psyche," said Mark Zandi, chief economist at Economy.com in West Chester, Pennsylvania.
The Conference Board said an error in calculating seasonal adjustments had also required it to revise higher its December 2003 and January 2004 data.
"While consumers claimed business conditions were more favorable in March than last month, they also claimed jobs were less readily available," said Lynn Franco, director of research at the company's Consumer Research Center.
"The labor market not only continues to dampen consumers' present-day spirits, but it is also making them less optimistic about the short-term outlook," Franco said in a statement.
The number of consumers saying jobs were hard to get rose in March to 30.0 percent from February's 28.9 percent.
"... people are still finding it difficult to find jobs and this (jobs hard to get component) is more evidence that the kind of hiring we're seeing is obviously not enough to make the consumer feel that there is some kind of improvement," said Elisabeth Denison, economist at Dresdner Kleinwort Wasserstein in New York.
Consumers' view of the future dimmed slightly, moving the expectations index down to 91.0 from 91.9, while the present situation index rose to 84.1 from 83.3.
The dollar trimmed some of its losses on the report, but still held in negative territory, while Treasuries initially dipped on the report, but then regained ground as the dim outlook on jobs sank in. U.S. stocks weakened on the news.
MIXED SPENDING SIGNALS
Two earlier reports on consumer spending habits sent mixed signals to investors on Tuesday.
A joint report by the International Council of Shopping Centers and investment firm UBS said sales at U.S. chain stores fell 1.9 percent in the week ended March 27 compared to sales in the prior week, blamed mainly on rising gasoline costs.
However on a year-over-year basis, sales rose 6.6 percent in the week. Last year at this time, U.S. consumers tightened their purse strings as war in Iraq (news - web sites) raged.
A second report from Redbook, an independent research company, said Easter holiday-related purchases helped lift U.S. chain store sales in March by 0.1 percent compared with the entire month of February. On a year-over-year basis, sales rose 6.9 percent in the same week.
The University of Michigan's final reading of March consumer sentiment, reported last week, edged up unexpectedly, despite worries about slow job growth.
The Michigan report was at odds with a small drop in a consumer sentiment survey issued March 9 by Investor's Business Daily and TechnoMetrica Market Intelligence.
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