NEW YORK — Americans’ confidence in the economy has suffered a sudden reversal, dimming hopes that they will start spending — and spurring job growth — any time soon.
The Consumer Confidence Index figures released Tuesday were much worse than analysts had expected and showed that Americans are morose about the job market and their economic prospects. That bodes ill for the sort of uptick in consumer spending that normally powers job growth and could raise pressure on the Obama administration and Congress to create jobs themselves.
The index fell almost 11 points to 46 in February, down from a revised 56.5 in January. It erased three consecutive months of improvement, according to the Conference Board, the research group that releases the monthly index.
Analysts were expecting only a slight decrease to 55. Economists watch the confidence numbers closely because consumer spending accounts for about 70 percent of U.S. economic activity.
Outside of the Great Recession, the index hasn’t been this low since December 1974.
“It still feels like a recession,” said Lynn Franco, director of the Conference Board Consumer Research Center.
Confidence has been recovering fitfully since hitting a historic low of 25.3 in February 2009. Many economists believe it will remain well below healthy levels for at least another year or two.
A reading above 90 indicates an economy is on solid footing. Above 100 signals strong growth.
“Without a sustained acceleration in consumption growth, this recovery will eventually fade,” said Paul Ashworth, senior U.S. economist at Capital Economics Ltd.
