March consumer confidence down, outlook grim

By Ruth Mantell, MarketWatch

Last update: 10:14 a.m. EDT March 25, 2008

WASHINGTON (MarketWatch) -- U.S. consumer confidence fell in March, the Conference Board reported Tuesday, and expectations hit a 35-year low as pessimistic views of the business climate, the job market and personal income weighed on sentiment.

The March consumer confidence index fell to 64.5 from a revised reading of 76.4 in February. Economists surveyed by MarketWatch had expected a March reading of 73.3. Confidence has taken a hit in recent months from worries about jobs, housing prices and the economy. Consumer confidence is at its lowest since the Iraq War in 2003.

"Looking ahead, consumers' outlook for business conditions, the job market and their income prospects is quite pessimistic and suggests further weakening may be on the horizon," said Lynn Franco, director of consumer research at the private Conference Board.

Elsewhere Tuesday, the Case-Shiller home price index showed U.S. home prices in 20 major cities declined a record 2.4% in January, falling for the 18th month in a row and bringing down prices a record 10.7% in the past year. See full story.

Hitting its second-lowest level ever, the Conference Board's expectations index fell to 47.9 in March from 58.0 in February. In December 1973, expectations were at 45.2. Those expecting business conditions to worsen over the next six months rose to 25.4% in March from 21.6% in February. Those expecting fewer jobs rose to 29.0% from 28.0%.

Expectations for the inflation rate in 12 months rose to 6.1% from 5.4%.

Consumers' views of present-day conditions declined to 89.2 in March from 104.0 in February. Those claiming business conditions are bad rose to 25.4% from 21.3%. Those saying jobs are "hard to get" rose to 25.1% from 23.4%, and those saying jobs are "plentiful" fell to 18.8% from 21.5%.

Ruth Mantell is a MarketWatch reporter based in Washington.