Gas that costs nearly $4 a gallon seems to be a consumer confidence-killer, pushing one measure of how Americans feel in March down off a 1-year high.
The monthly index compiled by the Conference Board slipped to 70.2 from 71.6 in February. The small tumble demonstrates the lingering ambiguity of falling home prices (signaling a weak housing market) amid an improving job market.
It’s not quite the all-time low of 25.3, which the index reached in February 2009, but the measure is also nowhere near the 90 level that signals a healthy economy.
“March goes out like a lamb,” wrote analysts from Credit Suisse. They expected better news in April, which has seen rising consumer confidence in 23 out of 34 years.
Consumers appear to be most cowed by the seemingly inexorable creep of fuel prices, which on Tuesday hit nearly $3.99 a gallon, up 5 cents from last week and more than 30 cents more than a month ago, according to AAA’s Fuel Gauge Report.
With more of their money spilling into their gas tanks, consumers may be less likely to spend – an activity that makes up roughly 70% of the economy. Luckily, the Conference Board report suggests that more people expect their income to rise in the next six months (15.8% of respondents compared with 15.5% last month).
The rest of the report showed deep ambivalence among consumers.
The most people since September 2008 are pleased with their current conditions, with the index reaching 51 from 46.4 in February. But expectations for the upcoming six-month period fell to 83 from 88.4.
The percentage of respondents who believe that jobs are plentiful rose to 9.4% from 7%, a 3.5-year high. But an increasing number of people also think that jobs are hard to get. Fewer consumers expect the employment market to continue expanding.
Same deal with business conditions – more people think the environment will improve but more also predict that they’ll worsen.
Another study on consumer confidence, produced by Thomson Reuters and the University of Michigan, will be released Friday.