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Mixed signals found in Confidence Report

NEW YORK -In what is being considered a "rebound," the consumer confidence index broke a five-month losing string in March to finish at 117.0-up more than 7 percent from the downwardly revised 109.2 figure posted for February.

As reported by The Conference Board, consumer confidence got its early spring boost by, employment prospects. Even in the face of both actual and speculated layoffs by some of the nation's high-profile companies, the consumers surveyed by the board portrayed a rosy outlook for their job situations over the next six months.

Their assessments were enough to pump up the expectations component of the overall index nearly 13 points from February to March, to 83.6. The present-situations index, the other of the two major components, was virtually flat last month, finishing at 167.2.

The consumer confidence indices increased for eight of the nine U.S. regions in the survey. The largest increase, 11.7 percent, occurred in the West North Central region, whose index hit 119.9. The only lagging region was the Middle Atlantic, whose index slipped 2.8 percent to 98.9.

Lynn Franco, director of The Conference Board's consumer research center said: "The recent weakness in the stock market has done little to dampen either consumers' assessment of present economic conditions or further expectations."

Michael Niemira, analyst with the Bank of Tokyo-Mitsubishi, noted that the March reading was the highest for the index since December.

Yet Niemira's other observations seem to signal caution. The overall index is well below its historic high, 144.7, posted in January of last year. Also, he said, the expectations component is below its historic average of 96.4.

Dana Johnson, analyst with Banc One Capital Markets, said the behavior of present situations and expectations, reflected consumers' moods regarding their employment prospects-flat for now, better down the road, in other words.

Regarding the labor market, Johnson said, "The report seems to suggest no noteworthy further deterioration." If current employment data bear this out, he added, the Federal Reserve may not need to do any more with interest rates - following its latest rates slash two weeks ago.

Consumer confidence by region


REGION % CHANGE

New England

1.5

Middle Atlantic

-2.8

East North Central

11.2

West North Central

11.7

South Atlantic

7.5

East South Central

9.5

West South Central

2.5

Mountain

8.1

Pacific

6.3


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