By EILEEN ALT POWELL
AP Business Writer
NEW YORK (AP) - Consumer confidence plunged in February as
Americans worried about less-favorable business conditions and job
prospects, a business-backed research group said Tuesday.
The Conference Board said its Consumer Confidence Index fell to
75.0 this month from a revised 87.3 in January.
The reading was the lowest since the index registered 64.8 in
February 2003, just before the U.S. invaded Iraq, researchers said,
and was far below the 83.0 expected by analysts surveyed by
Thomson/IFR.
The index measures how consumers feel about the economy. It has
been weakening since July, suggesting that wary consumers may
retrench financially, which could fatigue the economy further.
The expectations index, which measures consumers' outlook over
the next six months, fared even worse. The expectations index
dropped to 57.9 from 69.3 in January. The February figure was a
17-year low, the Conference Board said, standing just a bit above
the 55.3 of January 1991.
Lynn Franco, director of The Conference Board's Consumer
Research Center, said in a statement that the consumer confidence
survey - which is based on a sample of 5,000 U.S. households -
indicated that consumers felt economic conditions were
deteriorating.
"The weakening in consumers' assessment of current conditions,
fueled by a combination of less-favorable business conditions and a
sharp rise in the number of consumers saying jobs are hard to get,
suggest that the pace of growth in early 2008 has slowed even
further," Franco said in a statement accompanying the report.
She pointed to the low "expectations" reading and added:
"With so few consumers expecting conditions to turn around in the
months ahead, the outlook for the economy continues to worsen and
the risk of a recession continues to increase."
A third reading, the index looking at current conditions, also
dropped in February to 100.6 from 114.3 the month before.
Those saying jobs were "hard to get" rose to 23.8 percent in
February from 20.6 percent in January, while those claiming jobs
were "plentiful" decreased to 20.6 percent from 23.8 percent.
In Washington, meanwhile, the Labor Department reported that
inflation at the wholesale level soared in January, pushed higher
by rising costs for food, energy and medicine. The monthly increase
carried the annual inflation rate to its fastest jump in a quarter
century.
The department said wholesale prices rose 1 percent last month,
more than double the 0.4 percent increase that economists had been
expecting. The January surge left wholesale prices rising by 7.5
percent over the past 12 months, the fastest pace in more than 26
years.
And Standard & Poor's said Tuesday that U.S. home prices lost
8.9 percent in the final quarter of 2007, marking a full year of
declining values and the steepest drop in the 20-year history of
its housing index.
The S&P/Case-Shiller home price indices, which include a
quarterly index, a 20-city index and a 10-city index, reflect
year-over-year declines in 17 metropolitan areas with double-digit
declines in eight of them.
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On the Net:
www.conference-board.org
(Copyright 2008 by The Associated Press. All Rights Reserved.)
AP-NY-02-26-08 1019EST
