March consumer confidence index plunges to a 35-year low

Posted Mar 25th 2008 11:40AM by Joseph Lazzaro
Filed under: Bad News, Consumer Experience, Economic Data

U.S. consumer confidence is at its lowest level since the Nixon Administration of the 1970s, according to one measure. U.S. consumer confidence fell in March 2008 to 64.5 -- a 35-year low -- the Conference Board announced Tuesday.

Economists surveyed by Bloomberg News had expected the index to drop to 73.0 in March 2008. The February 2008 index was revised to 76.4.

The board said that consumers' evaluation of present-day conditions weakened significantly. Those claiming business conditions are "bad" increased to 25.4% from 21.3%, while those claiming business conditions are "good" declined to 15.4% from 19.1%. Consumers' assessment of the job market was considerably more pessimistic than last month. Those saying jobs are "hard to get" rose to 25.1% from 23.4%, while those claiming jobs are "plentiful" decreased to 18.8% from 21.5%.

'A legitimate concern'

Economist Glen Langan told BloggingStocks Tuesday the latest consumer confidence reading is a reflection of the reality many consumers face. "You have stagnant wages for many citizens, high energy prices, food prices marching up, and the worst housing market in a generation, so it's not a surprise to see a low confidence statistic," Langan said. "There is a legitimate concern in the populace that economic conditions may worsen."

Further, the board said that consumers' short-term expectations also deteriorated considerably. Consumers expecting business conditions to worsen over the next six months increased sharply to 25.4% from 21.6%, while those anticipating business conditions to improve declined to 8.1% from 9.7%.

In addition, the outlook for the labor market was also significantly more pessimistic, the board said. Those expecting fewer jobs in the months ahead surged to 29.0% from 28.0%, while those anticipating more jobs declined to 7.7% from 8.9%.

The Conference Board's consumer confidence index is based on a representative sample of 5,000 households.

Tags: 1970s, business conditions, consumer confidence, consumers, CPI, energy prices, food, food prices, inflation, inthenews, job growth, jobs, Nixon, oil, President Nixon, U.S. economy