Short-term outlook extremely cautious
Don Hogsett -- Home Textiles Today, February 3, 2003
With war drums making Americans jittery, compounding the effects of a soft jobs market and a sluggish economy, consumer confidence continued its long downward slide in January, slipping by 2.1 percent to a level of 79.0, down from 80.7 in December, The Conference Board reported.
It was the seventh decline in consumer sentiment during the past nine months, and leaves the bellwether gauge down more than 28 percent from a 13-month high of 110.3 recorded last May.
"Overall readings continue to reflect the country's lackluster economic activity," said Lynn Franco, director of the business think tank's Consumer Research Center. "Now, with the threat of war looming, consumers have grown increasingly cautious about the short-term look."
Perhaps surprisingly, consumers are feeling better about current economic conditions than they are about the six-month outlook. The monthly survey's Present Situation Index, which charts how consumers feel about what's happening now, actually rose by 8.3 percent in January, to a level of 75.4 from 69.6 in December.
But when consumers were asked to look six months out, they grew more antsy, and the Expectations Index declined by 7.6 percent, to a level of 81.4 from 88.1.
The employment outlook remained weak, and the number of consumers who expect fewer jobs in the coming months edged up to 20.9 percent from 20.2 percent in December. The number who expect more jobs to become available dwindled to 18.4 percent from 19.6 percent.
However, consumers are still eager to own their own homes, and home-buying plans edged up by 6.3 percent, even as plans to buy cars and major appliances declined.
Consumer confidence by region
|East North Central||3.6|
|West North Central||7.7|
|East South Central||-2.8|
|West South Central||5.5|
Consumer Buying Plans — January
plans to purchase over the next six months
|Source: The Conference Board
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