- The Washington Times - Tuesday, March 25, 2003

NEW YORK, March 25 (UPI) — The Conference Board said Tuesday consumer confidence in the nation's economy fell in March, as the nation prepared to go to war with Iraq, to its lowest level since October 1993.

The private research group said its index measuring consumer confidence, which uses 1985 as a base of 100, fell 2.3 points to 62.5 from 64.8 in February and 78.8 in January.

March's performance was the fourth consecutive monthly decline and drove the index to its lowest level since it stood at 60.5 in October 1993, when the United States was struggling to emerge from the 1990-1991 recession.

The board said its survey reflected responses received through March 18 and is a snapshot of consumer attitudes in the days before the war with Iraq began March 19.

Economists on Wall Street were expecting confidence decline to 62 during March.

Lynn Franco, director of the Conference Board's consumer research center, said, "While a quick and successful outcome in the Middle East conflict would certainly ease some of the uncertainties facing consumers and therefore boost confidence, it is the economic fundamentals that will determine whether a rebound is sustainable.

"The end of the Gulf War in 1991 produced a surge in confidence, but labor market conditions quickly diminished the spark. So if history repeats itself, the current job scenario will do little to maintain any post-war surge in confidence," Franco added.

The survey of consumer attitudes concerning both the present situation as well as expectations regarding economic conditions is directly related to the strength of consumer spending. Consumer spending accounts for two-thirds of the economy.

The board said the survey, which is based on a sample of 5,000 U.S. households, showed its present situation index fell to 62.4 from 63.5 while its expectations index fell to 62.5 from 65.7 a month earlier.

The report showed consumers' appraisal of the current business environment mirrored last month's readings. Those rating present business conditions as bad remained virtually unchanged at 29.8 percent. Those holding the opposite view accounted for 13.8 percent.

The board said consumers reporting jobs are hard to get rose to 32.3 percent from 30.0 percent a month ago while those claiming jobs are plentiful remained relatively flat at 11.6 percent.

Consumers' short-term expectations were more pessimistic in March than in February. Those anticipating that business conditions will worsen over the next six months edged up to 19.9 percent from 19.1 percent while consumers anticipating an improvement fell to 13.3 percent from 14.9 percent.

The report showed the nation's employment outlook fared no better. Consumers anticipating more jobs to become available in the next six months declined to 11.1 percent from 12.4 percent while those expecting fewer jobs dropped to 26.1 percent from 28.5 percent a month ago. The board said consumers anticipating an increase in their incomes declined slightly to 15.8 percent from 16.0 percent a month earlier.

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