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Economy in Brief

U.S. Consumer Confidence Declines Sharply
by Tom Moeller  March 29, 2011

Consumers know full-well the implications of the recent jump in petroleum prices; and they aren't good. The Conference Board reported that its March index of consumer confidence fell 11.9% to 63.4 and retraced the 11.1% February rise, which was upwardly revised from 8.6%. The latest figure was lower than Consensus expectations for a reading of 65.4. During the last ten years there has been a 77% correlation between the level of confidence and the 12-month change in real personal consumption expenditures.

The expectations component led this month's drop with a 16.8% decline to the lowest level since November. Expectations for business conditions in six months deteriorated while far fewer expected more jobs. Consumers expected the inflation rate in twelve months to be an increased 6.7%. Interest rates in twelve months were expected to be higher by an increased 55.8% of respondents. Just 13.6% expected rates to fall. A lessened 30.4% of respondents expected stock prices to rise, the lowest since October.

The present situations component of the consumer confidence index rose to its highest level since November 2008. Business Conditions were seen as good by an improved 15.1% of respondents. Jobs were seen as hard to get by a stable 44.6%, the least since June.

The Conference Board data can be found in Haver's CBDB database. The expectation figure is the AS1REPNA database.

Recent College Graduates and the Labor Market from the Federal Reserve Bank of San Francisco can be found here.

Conference Board (SA, 1985=100) Mar Feb Jan Y/Y % 2010 2009 2008
Consumer Confidence Index 63.4 72.0 64.8 21.2 54.5 45.2 57.9
 Present Situation 36.9 33.8 31.1 46.4 25.7 24.0 69.9
 Expectations 81.1 95.5 87.3 15 .2 73.7 59.3 50.0
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