U.S. Consumer Confidence Drops, Poll Shows
By JEANNINE AVERSA
WASHINGTON (AP) - Consumer confidence dropped in early March as people fretted about the economy's performance and their own financial fate in the months ahead.
The RBC CASH Index, based on results from the international polling firm Ipsos, showed confidence at 86.2 in early March.
That was down considerably from February's reading of 96.1 - a 16-month high. But it was in the ballpark with consumers' feelings about economic conditions in March of last year, when the index stood at 84.2.
``Consumers aren't knocking the cover off the ball. Their confidence isn't a grand slam, but they aren't striking out, either,'' said Richard Yamarone, economist at Argus Research.
Even with the drop, analysts believe consumers are in a generally good frame of mind about the economy, although they are growing more anxious about the future.
Analysts believe that angst is tied to consumer concerns about whether the housing market this year will slow gradually, as most economists predict, or whether it might crash.
Other things also may be coloring consumers' perception about the future, including rising interest rates and energy bills, economists said.
``It is the litany of uncertainty this year - the housing market moderation, worry about energy prices- that may be factoring into peoples' views about the future,'' said Carl Tannenbaum, chief economist at LaSalle Bank.
A measure looking at consumers' expectations over the next six months, including conditions where they live or work and their own financial positions, showed the most deterioration in March from February.
That expectations gauge fell to 40.7 in March, compared with 59.4 in February. A year ago, the expectations measure stood at 52.6.
Economists track consumer confidence for clues about consumers' willingness to spend, an important force shaping overall economic activity.
Analysts believe economic growth will clock in at 4.5 percent pace or possibly higher in the January-to-March period. That would mark a rebound from the 1.6 percent growth rate in the final quarter of 2005. Belt tightening by consumers was a factor in that weak performance.
Economic growth in the April-to-June quarter is also expected to be solid, analysts said.
``It is a little surprising given the strength of the economy that there is a perception - at least among some of the public - that the economy is not very good,'' said Edward Lazear, chairman of the White House's Council of Economic Advisers.
When it comes to the economy, what really counts is what consumers do, rather than what they say.
``Are people behaving as if they believe this is a weak economy? I see no indication of that. In fact, I see the contrary,'' Lazear said.
President Bush, however, continues to cope with sagging job-approval ratings. Just 37 percent approve of his overall performance, the lowest level of his presidency, according to an AP-Ipsos poll.
On the consumer confidence front, attitudes about current economic conditions dipped to 103.9 in March, a still good showing, economists said. That was down from 111.6 in February but better than the reading of 92.9 in March of last year.
Another index tracking consumers' feelings about making a purchase, saving and other investment decisions was 98.6 in March, down from 101.5 in February. A year ago, this measure stood at 88.5.
For nearly two years, the Federal Reserve has been boosting short-term interest rates to keep the economy and inflation on an even keel. Rates are expected to go up again on March 28.
Borrowers do not like rising rates. Nor do homeowners with short-term adjustable rate mortgages, which have been climbing. But for savers higher interest rates means better returns.
A measure on consumers sentiments about the jobs climate slipped to 118.5 in March, from 119.3 in February. In March of last year, the jobs index was 119.2.
The overall confidence index is benchmarked to a reading of 100 on January 2002, when Ipsos started the gauge.
The RBC consumer confidence index and the AP-Ipsos poll for March were based on results of 1,000 adults surveyed Monday through Wednesday about their attitudes on politics, personal finance and the economy. Results of the survey had a margin of error of plus or minus 3 percentage points.
By JEANNINE AVERSA
WASHINGTON (AP) - Consumer confidence dropped in early March as people fretted about the economy's performance and their own financial fate in the months ahead.
The RBC CASH Index, based on results from the international polling firm Ipsos, showed confidence at 86.2 in early March.
That was down considerably from February's reading of 96.1 - a 16-month high. But it was in the ballpark with consumers' feelings about economic conditions in March of last year, when the index stood at 84.2.
``Consumers aren't knocking the cover off the ball. Their confidence isn't a grand slam, but they aren't striking out, either,'' said Richard Yamarone, economist at Argus Research.
Even with the drop, analysts believe consumers are in a generally good frame of mind about the economy, although they are growing more anxious about the future.
Analysts believe that angst is tied to consumer concerns about whether the housing market this year will slow gradually, as most economists predict, or whether it might crash.
Other things also may be coloring consumers' perception about the future, including rising interest rates and energy bills, economists said.
``It is the litany of uncertainty this year - the housing market moderation, worry about energy prices- that may be factoring into peoples' views about the future,'' said Carl Tannenbaum, chief economist at LaSalle Bank.
A measure looking at consumers' expectations over the next six months, including conditions where they live or work and their own financial positions, showed the most deterioration in March from February.
That expectations gauge fell to 40.7 in March, compared with 59.4 in February. A year ago, the expectations measure stood at 52.6.
Economists track consumer confidence for clues about consumers' willingness to spend, an important force shaping overall economic activity.
Analysts believe economic growth will clock in at 4.5 percent pace or possibly higher in the January-to-March period. That would mark a rebound from the 1.6 percent growth rate in the final quarter of 2005. Belt tightening by consumers was a factor in that weak performance.
Economic growth in the April-to-June quarter is also expected to be solid, analysts said.
``It is a little surprising given the strength of the economy that there is a perception - at least among some of the public - that the economy is not very good,'' said Edward Lazear, chairman of the White House's Council of Economic Advisers.
When it comes to the economy, what really counts is what consumers do, rather than what they say.
``Are people behaving as if they believe this is a weak economy? I see no indication of that. In fact, I see the contrary,'' Lazear said.
President Bush, however, continues to cope with sagging job-approval ratings. Just 37 percent approve of his overall performance, the lowest level of his presidency, according to an AP-Ipsos poll.
On the consumer confidence front, attitudes about current economic conditions dipped to 103.9 in March, a still good showing, economists said. That was down from 111.6 in February but better than the reading of 92.9 in March of last year.
Another index tracking consumers' feelings about making a purchase, saving and other investment decisions was 98.6 in March, down from 101.5 in February. A year ago, this measure stood at 88.5.
For nearly two years, the Federal Reserve has been boosting short-term interest rates to keep the economy and inflation on an even keel. Rates are expected to go up again on March 28.
Borrowers do not like rising rates. Nor do homeowners with short-term adjustable rate mortgages, which have been climbing. But for savers higher interest rates means better returns.
A measure on consumers sentiments about the jobs climate slipped to 118.5 in March, from 119.3 in February. In March of last year, the jobs index was 119.2.
The overall confidence index is benchmarked to a reading of 100 on January 2002, when Ipsos started the gauge.
The RBC consumer confidence index and the AP-Ipsos poll for March were based on results of 1,000 adults surveyed Monday through Wednesday about their attitudes on politics, personal finance and the economy. Results of the survey had a margin of error of plus or minus 3 percentage points.
