Confidence levels slump to 10-year low
March 3, 2003-- Home Textiles Today,
With Americans spooked by war talk, concerned about their jobs, rattled by an unsettled stock market and now paying higher prices at the gas pump, consumer confidence went into a freefall in February, plunging to its lowest level in 10 years.
The Conference Board reported that its widely watched barometer of consumer spending as well as sentiment dropped by 18.8 percent last month to a reading of 64.0 from 78.8 in January, catching analysts and economists by surprise with the steepness of the decline.
It was the third straight decline in the business think tank's index of consumer sentiment, pushing the bellwether gauge to its lowest level since October 1993, when confidence stood at a level of 60.5.
Consumers were "extremely bleak," said The Conference Board, when they assayed current business conditions. The number who said conditions are "bad" rose to 30.7 percent from 26.7 percent in January. And the number of those who those who think conditions are "good" only weakened further, falling to 13.2 percent from 15.0 percent.
Looking out six months ahead, consumers were "considerably more pessimistic," The Conference Board reported, with the number who think that business conditions will worsen jumping up to 19.0 percent from 14.0 percent.
The employment outlook remained grim as well. The number reporting jobs are hard to find climbed to a nine-year high of 30.1 percent from 28.9 percent.
Consumers seemed to sense that the one thing of consistent value is their home, and planned to keep buying them. Buying plans for carpets, cars and major appliances all fell during February, but plans to buy a home still improved, rising by 5.6 percent.
Consumer confidence by region
|East North Central||-27.4|
|West North Central||-15.2|
|East South Central||-18.8|
|West South Central||-20.1|
Consumer Buying Plans — February
plans to purchase over the next six months
|Source: The Conference Board
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