Consumer confidence slides

March 26, 2003
The latest measure of consumer attitudes in the United States shows confidence is in decline about job security and the overall health of the economy – beliefs only partially affected by the war in Iraq.
The latest measure of consumer attitudes in the United States shows confidence is in decline about job security and the overall health of the economy – beliefs only partially affected by the war in Iraq.

The Conference Board released its Consumer Confidence Index measure for March this week and found confidence was down to 62.5 after falling sharply to 64.8 in February.

On top of that, a study by Philadelphia-based Right Management Consultants found that more than one out of four Americans believe they could lose their job in the coming year, a level of pessimism surpassed only by workers in Great Britain.

"We are seeing a new level of pessimism among American workers," said Right chairman & CEO Richard Pinola. "The stalled economy, flat business prospects and months of uncertainty about the prospects of war are taking their toll."

Both groups are quick to note that the war in Iraq is not the main reason for the drop in U.S. consumer and worker confidence.

"While a quick and successful outcome in the Middle East conflict would certainly ease some of the uncertainties facing consumers and therefore boost confidence, it is the economic fundamentals that will determine whether a rebound is sustainable," said Lynn Franco, director of the Conference Board's Consumer Research Center.

"The end of the Gulf War in 1991 produced a surge in confidence, but labor market conditions quickly diminished the spark," Franco said. "So if history repeats itself, the current job scenario will do little to maintain any post-war surge in confidence."

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