Investing

Consumer Confidence Plunges Unexpectedly in March

The Conference Board is out with its March 2013 reading of consumer confidence. This is much broader than the “sentiment” report from the University of Michigan, but it is also released later in the month. Wall St. should be deeply disappointed here, as confidence dropped to 59.7 from 68.0 in February. Dow Jones was calling for 67.1 for March.

As far as how this was broken down, it was a severe drop in expectations, versus a slight drop in the current period. The Present Situation Index fell to 57.9 in March from 61.4 in February. The Expectations Index was the real catalyst, with it falling all the way to 60.9 in March from 72.4 last month.

About all we can offer as a caveat here is that the cutoff date for the preliminary results was March 14. This quote shows the disappointment:

This month’s retreat was driven primarily by a sharp decline in expectations, although consumers were also more pessimistic in their assessment of current conditions. The loss of confidence, particularly expectations, mirrors the losses experienced this past December and January. The recent sequester has created uncertainty regarding the economic outlook and as a result, consumers are less confident.

Those saying business conditions are “good” decreased to 16.0% from 17.6%, while those stating business conditions are “bad” increased to 29.3% from 28.2%. Those claiming jobs are “plentiful” fell to 9.4% from 10.1%, but those claiming jobs are “hard to get” slipped to 36.2% from 36.9%.

We have reason to prefer the consumer confidence reading from the Conference Board over the University of Michigan’s report on consumer sentiment. The difference is 3,000 households surveyed by the former, as opposed to 500 households surveyed by the latter.

Today’s data may not be a shock to many, but it is not heading in the right direction. Maybe some of the outlook is based on the shenanigans in Washington D.C., or maybe it was just a bad timing. Still, it is a bit puzzling to see this at the same time as the DJIA and S&P 500 are challenging all-time highs.

We have not seen a disruption in the markets. The DJIA is still up 81 points at 14,529, and the S&P 500 is up about 7.60 at 1,559.

Read also: 10 Stocks That Will Drive The S&P 500 to New All-Time Highs

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