NEW YORK — American consumers are gloomier about the economy than at any point since just before the U.S. invasion of Iraq, as slumping housing prices and soaring fuel costs depress consumer confidence to its lowest level in five years.
The Conference Board, a business-backed research group, said Tuesday that its Consumer Confidence Index plunged to 64.5 in March from a revised 76.4 in February.
The March reading, far below the 73.0 expected by analysts surveyed by Thomson/IFR, was the worst reading since the gauge registered 61.4 in March 2003, just ahead of the U.S. invasion of Iraq.
Weakening consumer confidence foreshadows weakening consumer spending, which could hurt the already faltering economy.
The Consumer Confidence Index has been weakening since July, and Lynn Franco, the director of the Conference Board’s research center, said further decline was likely.
“Consumers’ outlook for business conditions, the job market and their income prospects is quite pessimistic and suggests further weakening may be on the horizon,” she said.
Brian Bethune, the chief U.S. financial economist with Global Insight in Lexington, Mass., expects the April confidence reading to be dreary, too.
“We expect overall payroll employment to decline for the third consecutive month, . . . and there is no immediate relief in sight for gasoline prices or other energy costs,” he said.
The present situation index, which looks at current conditions, slumped to 89.2 in March, from 104.0 the month before. The expectations index, which looks ahead, dropped to a 35-year low of 47.9 in March, from 58.0 in February. The Associated Press
