US consumer confidence falls as worries about the economy mount
US consumer confidence declined in March following an increase in February, the latest data has shown, as Americans raise concerns about the economy
The widely-watched consumer confidence index, released today by US business research group The Conference Board, now stands at 124.1, down from 131.4 in February.
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The data comes after the US Federal Reserve said it would hold interest rates longer than expected last week, as the US economy grapples with tough global economic conditions and indicators cause markets fret about recession risk.
The expectations index – based on consumers’ short-term outlook for income, business and labour market conditions – fell from 103.8 in February to 99.8 this month. It is part of a raft of data about consumer confidence released by The Conference Board in association with data company Nielsen.
The number of consumers stating business conditions are good fell from 40.6 per cent to 33.4 per cent. Meanwhile, those saying business conditions are bad increased from 11.1 per cent to 13.6 per cent.
Lynn Franco, senior director of economic indicators at The Conference Board, said: “The overall trend in confidence has been softening since last summer, pointing to a moderation in economic growth.”
“Confidence has been somewhat volatile over the past few months, as consumers have had to weather volatility in the financial markets, a partial government shutdown and a very weak February jobs report.”
She added: “Despite these dynamics, consumers remain confident that the economy will continue expanding in the near term.”
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The news comes after speculation among analysts about a possible recession following the inversion of the so-called yield curve, a situation that arises when yields on longer-dated bonds are lower than those on shorter-dated ones. It is commonly seen as a precursor to a contraction.
However, strategists at UBS Business Solutions said they “do not see cause for alarm”. But, they added, “while a US recession doesn’t appear imminent, the Fed’s dovishness has been insufficient to allay fears about the weakening in growth that lies behind the shift in policy stance.”