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Job worries sap key consumer confidence

Don Hogsett -- Home Textiles Today, January 5, 2004

With Americans still feeling antsy about the overall job outlook, and fretting about their future earnings, consumer confidence dipped modestly in December — just in time to dampen holiday shopping, The Conference Board reported.

After a dramatic run-up the month before, the bellwether index slipped by 1.3 percent to a reading of 91.3, giving up a small portion of the prior month's hefty gain of more than 13 percent. But even after losing ground modestly during December, confidence remained near its highest point in 13 months, and more than 13 percent, or 10.6 percent points, above its year-ago level of 80.7.

Over the past eight months, confidence levels have climbed enormously, and now stand almost 50 percent higher than the low-water mark of 61.4 recorded in March.

Consumers are feeling better about the future direction of the economy, and that "signals healthy economic growth in 2004," said Lynn Franco, director of The Conference Board's Consumer Research Center.

"But job worries continue," she pointed out, depressing the way consumers feel about current economic conditions. "Consumers' lackluster assessment of current conditions reflects continuing anxiety about labor market conditions. While consumers expect the job situation to improve in the months ahead, until a significant turnaround takes place, consumers' optimism about current-day conditions will continue to lag behind their expectations."

Jobs and incomes remain a sticking point, and consumers' reading of current labor market conditions deteriorated in December, The Conference Board reported. The number of consumers who think jobs are 'hard to get' rose to 32.6 percent, up from 29.6 percent the preceding month.

Consumer confidence by region

Source: The Conference Board
New England -11.7%
Middle Atlantic -3.0
East North Central -0.2
West North Central +5.6
South Atlantic +2.8
East South Central -11.8
West South Central +1.2
Mountain +0.4
Pacific -3.4

Consumer Buying Plans — December plans to purchase over the next six months

Homes +0.0%
Source: The Conference Board
Carpets -7.5
Cars +3.4
Major Appliances -3.4
Vacation +2.6