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U.S. Consumer Confidence Slumped in March, Missing Forecasts

U.S. consumer confidence declined for the fourth time in five months on dimmer assessments of present conditions. 

U.S. Consumer Confidence Slumped in March, Missing Forecasts
A shopper carries bags on Market Street in San Francisco, California, U.S. (Photographer: David Paul Morris/Bloomberg)  

(Bloomberg) -- U.S. consumer confidence declined for the fourth time in five months on dimmer assessments of present conditions, suggesting that weak first-quarter growth and slower job gains in February are weighing on attitudes and potentially spending.

The Conference Board’s index fell to 124.1 from 131.4, the New York-based group said in a report Tuesday. That missed all economist estimates in a Bloomberg survey calling for a rise to 132.5. The gauge of views on the present situation fell to the lowest level in almost a year, while the expectations index also weakened.

U.S. Consumer Confidence Slumped in March, Missing Forecasts

Key Insights

  • The drop follows a report showing U.S. employers added just 20,000 jobs in February, the smallest gain in almost a year, and analysts are projecting the weakest economic growth this quarter since 2016. In addition, gasoline prices have jumped in recent weeks, leaving Americans with less power to spend on other goods and services.
  • At the same time, consumer attitudes are likely to be supported by the best wage gains in a decade, a rebound in the stock market this year and the Federal Reserve’s pledge to be patient on raising interest rates.
  • The survey results contrast with the University of Michigan’s preliminary March sentiment, which advanced more than expected to the highest measure this year led by increases in outlooks for incomes and the economy.

Economist’s View

“Consumer confidence is in a soft patch. It is still elevated by historical standards, so we’re not yet worried about a retrenchment in spending, but last year’s sugar high has worn off,” Tim Quinlan, a senior economist at Wells Fargo & Co., wrote in a report. “The stock market selloff late last year likely played a role, and though equities have retraced some lost ground, the market-related dent to confidence has yet to be fully restored.”

What Bloomberg’s Economists Say

“While economic conditions are likely to moderate this year –- meaning we’ve passed peak confidence for the cycle -- this month’s slump is too severe when measured against underlying conditions.”
-- Tim Mahedy, Eliza Winger and Carl Riccadonna, economists
Click here for the full note.

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  • Respondents saying jobs are plentiful decreased to 42 percent from 45.7 percent, while those who saw jobs as hard to get rose to 13.7 percent from 11.7 percent.
  • The labor differential -- which measures the gap between respondents saying jobs are plentiful and those who say they’re hard to get -- fell to the lowest since July.
  • Buying plans for cars and homes both increased.

--With assistance from Kristy Scheuble.

To contact the reporter on this story: Carlyann Edwards in Washington at cedwards136@bloomberg.net

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Jeff Kearns

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