- The Washington Times - Friday, January 31, 2003

ANN ARBOR, Mich., Jan. 31 (UPI) — Consumer sentiment fell in January as concerns over financial prospects grew, fueled by fears of war with Iraq.

Richard Curtin, director of the Surveys of Consumers at the University of Michigan, said consumers are expecting wage gains to remain small and job prospects scarce.

"While a war with Iraq is not the only source of concern, it is likely that in the months ahead the war will dominate changes in consumer confidence," Curtin said.

Curtin said the president's recently announced tax cut proposals did little to bolster consumer sentiment, with faith in government economic policies at "its lowest level since President Bush first took office." Curtin said Bush's economic policies are viewed unfavorably by most consumers and he said data predicts spending will slow in 2003.

The Index of Consumer Sentiment stood at 82.4 in January, down from 86.7 in December and 93.0 in January 2002. The Index of Consumer Expectations fell to 72.8, its lowest level since the recession of the early 1990s.

Consumers are concerned primarily about job prospects.

"While consumers expect the economy to stagger forward, they think the pace of growth will be too slow to keep the unemployment rate from rising," Curtin said.

On the positive side, consumers believe inflation will remain low.

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