ICS Magazine

Consumer Confidence Spirals Downward

February 25, 2003
NEW YORK (Reuters) - Consumer confidence fell an unexpectedly sharp 15 points in February to its lowest level since October 1993 as Americans fretted about weak stock prices, rising oil prices and the increasing threat of war with Iraq.

The Consumer Confidence Index fell to 64.0 in February from a downwardly revised 78.8 in January, the Conference Board, a private business research group, said in a release on Tuesday.

It was the third consecutive monthly decline. Economists on average had expected the index to fall to 76.8. Consumer confidence is closely watched by economists and businesses for clues about spending, which makes up two-thirds of the U.S. economy.

"Lackluster job and financial markets, rising fuel costs and the increasing threat of war and terrorism appear to have taken a toll on consumers," said Lynn Franco, director of the Conference Board's Consumer Research Center. "This month's confidence readings paint a gloomy picture of current economic conditions, with no apparent rebound on the short-term horizon."

The Present Situation Index, a measure of consumers' current attitudes about the economy and their finances right now, dropped to 61.6 in February from 75.3 in January. The Expectations Index, a gauge of consumers' six-month outlook, fell to 65.6 from a revised 81.1.