- Peter Kinder resigns federal agency post, concludes position unnecessary and waste of tax dollars (6/16/18)2
- Stormy Daniels to visit East Cape Girardeau (6/13/18)20
- Longtime downtown Cape bartender Marcellus Jones remembered by friends (6/12/18)2
- A community rallies behind Honorable Young Men's Club (6/16/18)1
- Couple charged in beating death at Brick's (6/13/18)
- Southeast to spend $150,000 to refresh brand with Ohio firm (6/19/18)6
- New urban dance studio opens on Broadway (6/15/18)2
- Jackson natives compete in 260-mile canoe race (6/16/18)1
- Feeding deer in Bollinger, Cape and Perry counties prohibited soon to help curb spread of CWD (6/13/18)7
- New Zaxby's restaurant open in Cape (6/13/18)3
Consumer confidence falls more than expected during February
NEW YORK -- Americans in February became less optimistic about the overall economy, especially the short-term prospects for the job market, sending a widely followed barometer of consumer sentiment below analysts' estimates.
The Conference Board, a New York-based private research group, said Tuesday its consumer confidence index fell to 101.7 from a revised 106.8 in January, the highest level since May 2002. The drop in February stalled a rebound in the index that began in November following the Gulf Coast hurricanes. Analysts had expected a reading of 104.0 in February.
In a statement, Lynn Franco, director of The Conference Board Consumer Research Center, said "consumers are growing increasingly concerned about the short-term health of the economy and, in turn, about job prospects."
But consumers' assessment of present conditions is holding steady at a four-and-a-half-year high, suggesting that the start of 2006 will be better than the end of 2005, Franco said.
The report came as the Commerce Department reported that the economy grew at an annual rate of 1.6 percent in the final quarter of 2005, a lackluster performance but still slightly better than originally thought.
Stock prices fell as traders worried the stronger-than-expected growth in gross domestic product could prompt the Federal Reserve to continue raising short-term interest rates. In afternoon trading, the Dow Jones industrial average fell 99.17, or 0.89 percent, to 10,998.38.
The Standard & Poor's 500 index fell 12.72, or 0.98 percent, to 1,281.40.
The component of the consumer confidence index that assesses views of current economic conditions rose to 129.3 from 128.8. But another component that measures consumers' outlook over the next six months, the Expectations Index, fell to 83.3 from 92.1 in January.
Excluding the two months following Hurricane Katrina, the Expectations Index in February was at its lowest level since March 2003, when it was 61.4. Franco warned that if expectations continue to lose ground, the outlook for the remainder of the year could deteriorate.
The downbeat report cast a cloud over spring retail sales and tempered the outlook for the economy. Economists closely track consumer confidence because consumer spending accounts for two-thirds of all U.S. economic activity. Still, the report wasn't seen as alarming since it covers just one month.
The results, however, come at an uncertain time for the U.S. economy. Job growth, while improving, has been uneven, and consumers face higher energy costs amid tensions in the Middle East and the prospect of at least two more interest rate increases. February had a lot going on, from announced layoffs at business software maker Oracle Corp. and renewed worries about pensions to concerns about Iran's nuclear ambitions.
"There is still a lot of uncertainty out there that is making people a little bit more cautious," said Gary Thayer, chief economist at A.G. Edwards & Sons Inc. But he added "consumers are still feeling pretty good."
Until now, consumer spending has held up, though many analysts expect the pace to slow down amid a cooling housing market, rising energy costs and higher interest rates. Thayer said he will be watching two areas closely: housing and jobs, which he believes determine consumer spending.
On Thursday, the nation's retailers are expected to report February sales that won't be as robust as in January, as the arrival of frigid weather cooled shoppers' appetite for spring apparel.
The Conference Board index is derived from responses received through Feb. 21 to a survey mailed to 5,000 households in a consumer research panel. The figures released Tuesday include responses from at least 2,500 households.
Consumers' appraisal of overall current conditions held steady in February, but consumers' views on labor market conditions were mixed. Consumers saying jobs are "plentiful" increased slightly to 27.3 from 27.0, while those claiming jobs are "hard to get" moved up to 20.7 from 20.3 percent.
Consumers expecting fewer jobs to become available in the coming months increased to 20.0 percent from 15.2 percent in January, while those expecting more jobs declined to 13.4 percent from 13.6 percent.