Consumer Confidence Index Slips Further

Consumer confidence fell in March, marking its second consecutive decline, as Americans grew more pessimistic about the outlook for an economy that is creating fewer jobs at this stage of expansion than any recovery since World War II, according to numbers released Friday.

The University of Michigan’s preliminary index of consumer sentiment declined to 94.1 from 94.4 in February, when confidence fell by the most since 9/11. The survey’s gauge of optimism over the next five months also posted its second consecutive drop, while an index of current conditions rose.

The weak job market hasn’t hurt spending. Businesses said sales rose 0.4% in January, keeping stockpiles lean, the Commerce Department reported in Washington. Inventories rose 0.1%, less than expected.

“If you look at what consumers are doing as opposed to what they’re telling pollsters, it’s actually a pretty good story,” said Henry Willmore, chief U.S. economist for Barclays Capital Inc. in New York.

The Commerce Department also reported Friday that the U.S. current account deficit narrowed in the fourth quarter to $127.5 billion as income rose from American investments abroad. The 3% decline in the dollar against a basket of six currencies during the quarter might have contributed by increasing the dollar value of overseas profits after they were translated from other currencies, economists said.

The preliminary Michigan index is based on a survey of about 250 households, half the sample size for the final reading on March 26. Economists surveyed projected a reading of 94.5, based on the median of 53 estimates.

The survey’s expectations index, which measures optimism about the next one to five months, fell to 86.6 from 88.5 a month earlier. The current conditions index, based on perceptions of consumers’ financial situation and whether it is a good time to make major purchases, rose to 105.7 from 103.6 in February.