Rising Gas Prices, Job Worries Hurt Consumer Outlook

TIMOTHY AEPPEL / Wall Street Journal 30mar2005

Rising gasoline prices and concerns about jobs helped to depress consumer confidence in March.

The Conference Board, a business-research group in New York, said its monthly index of consumer confidence fell to a reading of 102.4 from an upwardly revised 104.4 in February. People interviewed in the monthly survey of 5,000 households offered a mixed outlook on the job market: The number who said jobs were "plentiful" rose, as did the number who said jobs were "hard to get."

Economists monitor the survey to gauge the outlook for consumer spending, a key force in the current economic expansion.

Joshua Shapiro, chief U.S. economist for MFR Inc., an economic-research and consulting firm, said the consumer-confidence report for March points to further job gains when U.S. payroll-employment figures are released by the Labor Department Friday. "We're still at very good levels, which are indicative of a pretty reasonable labor-market recovery," he said. Mr. Shapiro expects March payrolls to grow by 225,000.

The survey found 21.3% of consumers said jobs were "plentiful," up from a revised 21.1% in February, while 23.8% said jobs were "hard to get," up from 22.4%. The number of those expecting more jobs to become available in coming months was unchanged at 15.1%, but those expecting fewer jobs fell to 15.8% from 16.5%. The proportion of consumers who expect their incomes to improve in the months ahead slid to 16.7% from 18.7% in February.

The Conference Board's report confirms a pattern already seen in a separate confidence survey conducted by the University of Michigan, which showed a modest decline in March.

"Despite rising prices at the pump and rising unemployment claims, overall consumers remain upbeat both in terms of their assessment of current conditions and their outlooks," said Conference Board economist Lynn Franco, "so there should be little change to their spending habits."

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