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Consumer confidence surges in March
March 31st, 2010
NEW YORK – After dropping off in the previous month, consumer confidence rebounded in March, according to The Conference Board.
The New York-based economic think tank said this week that its benchmark Consumer Confidence Index came in at 52.5 for March, rebounding from 46.4 in February, which had marked a slide from 56.5 in January and readings of over 50 during the 2009 holiday shopping season.
The index had plummeted to an all-time low of 25.3 in February 2009 and only inched up to 26.9 in the following month before jumping to 40.8 in April 2009 and then hovering in the high 40s to low 50s for the rest of last year.
While consumers have felt a bit better about spending so far in 2010, they remain uneasy about their financial security, according to Lynn Franco, director of the Conference Board’s Consumer Research Center.
“Consumer confidence, which had declined sharply in February, managed to recoup most of the loss in March,” Franco stated. “However, despite the March increase, consumers continue to express concern about current business and labor market conditions. And their outlook for the next six months is still rather pessimistic. Overall, consumer confidence levels have not changed significantly since last spring.”
Franco had noted in the February report that consumers are not only apprehensive about the job market but also “extremely pessimistic” about their income prospects, which could restrain retail spending growth.
Such concerns, along with declines in home values and the net worth of investment and retirement portfolios, have pushed many consumers to funnel more of their money into savings, a trend that also would take a bite out of retail expenditures.
A recent study by Allianz Group Economic Research said the U.S. savings rate could top 6% and stay at that level after surging to an average of 4.6% per household in 2009.
Many Americans also have been struggling to meet their financial obligations. A recent consumer poll by market research firm Mintel found that 36% of Americans have had trouble paying their bills in the past two years.
“With the recent economic crisis impacting people’s finances, it’s not surprising that a substantial portion of the population has been struggling with debt,” commented Susan Menke, a behavioral economist at Mintel.