The Conference Board Consumer Confidence Index fell sharply in March after showing an improvement in February.
The index dipped to 59.7 from a revised three-month high of 68.0 in February, according to data released today by the New York-based private research group.
Lynn Franco, director of economic indicators at The Conference Board, said in a statement that the decline “was driven primarily by a sharp decline in expectations, although consumers were also more pessimistic in their assessment of current conditions. The loss of confidence, particularly expectations, mirrors the losses experienced this past December and January. The recent sequester has created uncertainty regarding the economic outlook, and as a result, consumers are less confident.”
Bloomberg said consumer confidence fell more than was predicted. Economists that Bloomberg surveyed had projected that the March measure would fall to 67.5.
Concern mounted that sweeping cuts in planned government spending may hinder the expansion and limit recent progress in the labor market, Bloomberg said. At the same time, record stock prices and a housing rebound that’s helping to shore up household balance sheets may support consumer spending, which accounts for about 70 percent of the economy.
“So far the consumer has been fairly resilient, but I think the impact of higher taxes is still to come,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pa., told Bloomberg before the report was issued. “Some of the brinkmanship in Washington over the last few months may dampen consumers’ expectations.”
Forecasts of 79 economists surveyed by Bloomberg ranged from 60 to 72. The measure averaged 53.7 in the recession that ended in June 2009.