Consumer Confidence Sinks in March

The Conference Board said Tuesday that its consumer confidence index fell for the ninth time in 10 months, sinking to 62.5 in March.

The index had fallen sharply in February to 64.8, but this most recent decline brought to its lowest point since October 1993 when the index read 60.5, the board said.

The board said in its report that fears of a war in Iraq and rising energy costs both eroded U.S. consumers' feelings about the state of the economy, but that the threat of war was not the only drag on the economy.

"While a quick and successful outcome in the Middle East conflict would certainly ease some of the uncertainties facing consumers and therefore boost confidence, it is the economic fundamentals that will determine whether a rebound is sustainable," says Lynn Franco, director of the Conference Board's Consumer Research Center.

Franco drew a parallel to the 1991 Gulf War, when in the aftermath of the U.S. victory, confidence rose significantly, but the lack of business expansion and hiring pulled the economy back down.

The board added in its report that its expectations index fell to 62.5 in March from 65.7 and the present situation index dipped to 62.4 from 63.5 the previous month.

The cut-off date for the data collected by the Conference Board was March 18, the day before the United States and its allies launched “Operation Iraqi Freedom.”

Nearly a third of the 5,000 respondents to the board’s survey said that business conditions were “bad” and that about a quarter said they expected the number of available jobs to decline.

By Sean McNally

I>Staff Reporter

(Click here for the full press release.)