Consumer confidence, which fell sharply in February, remained relatively steady in March as worries persist about the job market, according to a business research group.
The Conference Board reported Tuesday that its consumer confidence index slipped to 88.3 this month from 88.5 in February. The February figure was sharply lower than the revised 97.7 reading in January.
The March figure was better than analysts’ projections of 86, but it still shows that the lack of job growth continues to dishearten consumers.
The Present Situations index, one component of the confidence index, rose to 84.1 from 83.3 in February. The Expectations Index, another component, fell to 91 from 91.9.
“While consumers claimed business conditions were more favorable in March than last month, they also claimed jobs were less readily available,” said Lynn Franco, director of The Conference Board’s Consumer Research Center in a statement. “The labor market not only continues to dampen consumers’ present-day spirits, but it is also making them less optimistic about the short-term outlook.”
Economists closely follow consumer confidence because consumer spending accounts for two-thirds of all economic activity in the United States.
Tax refunds, low interest rates, which has spurred more mortgage refinancing, and other incentives should continue to motivate consumers to spend in the short term, but economists worry about the second half of the year.
“When these start to wane, then consumers will be more dependent on jobs and wages to finance their spending,” said Scott Hoyt, director of consumer economics for Economy.com, a forecasting firm in West Chester, Pa.
Hoyt added that he was disappointed with consumers’ short-term assessment of jobs, and said it doesn’t bode well for the unemployment report that the Labor Department is slated to release on Friday.
Analysts expect the unemployment rate in March to hold steady at 5.6 percent, but are counting on nonfarm payrolls — government and private employers— to add 123,000 jobs. In February, the nation’s payrolls grew by just 21,000.
The Conference Board said that consumers’ optimism about future business conditions continues to wane. Those expecting business conditions to improve in the next six months dipped to 19.3 percent from 19.5 percent. Consumers expecting conditions to worsen was unchanged at 9.6 percent.
But their assessment of current conditions is more favorable than last month. Those claiming business conditions improved increased to 20.7 percent from 19.3 percent. Those saying conditions have worsened was almost unchanged at 23.3 percent.
Consumers claiming jobs are “hard to get” increased to 30 percent from 28.9 percent. But those saying jobs are “plentiful” rose slightly to 14.7 percent from 14.5 percent.
The six-month job outlook is mixed. Those anticipating more jobs to become available fell to 15.7 percent, down from 16.4 percent. Those expecting fewer jobs, however, declined to 17.3 percent from 18.8 percent. The proportion of consumers anticipating a decrease in their incomes rose to 10.1 percent from 8.4 percent in February.