Job Sector Troubles Curbing Optimism
Consumer confidence, which fell sharply in February, remained relatively steady in March as worries persisted about the job market, according to a business research group.
The Conference Board reported Tuesday that its consumer confidence index slipped to 88.3 this month from 88.5 in February. Last month’s figure was sharply lower than the revised 97.7 reading in January.
The March figure was better than analysts’ projections of 86, but it still showed that the lack of job growth continued to dishearten consumers.
The view of current conditions, one component of the confidence index, rose to 84.1 from 83.3 in February. The index component that measures expectations about future business conditions slipped to 91 from 91.9.
“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 the board’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.”
Economists closely follow consumer confidence because consumer spending accounts for two-thirds of economic activity in the United States.
Tax refunds, low interest rates, which have spurred more mortgage refinancing, and other incentives should continue to motivate consumers to spend in the short term, but economists worry about the second half of the year.
“When these start to wane, then consumers will be more dependent on jobs and wages to finance their spending,” said Scott Hoyt, director of consumer economics for Economy.com, a research and forecasting firm in West Chester, Pa.
Hoyt added that he was disappointed with consumers’ short-term assessment of jobs and said it didn’t bode well for the unemployment report the Labor Department was slated to release Friday.
Analysts expect the unemployment rate in March to hold steady at 5.6% but are counting on nonfarm payrolls -- government and private employers -- to add 123,000 jobs. In February, the nation’s payrolls grew by just 21,000.