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| In this photo taken Monday, Feb. 22, 2010, a woman tries out a mattress on display at the Sears retail store in Burbank, Calif. A private research group said Tuesday, March 30, 2010, consumers' confidence in the economy rebounded in March. But Americans are still wary as they deal with a weak job market |
NEW YORK (AP) -- Americans' confidence in the economy rebounded in March after a February plunge but remains relatively weak amid a tough job market, according to a private research group's monthly survey released Tuesday.
The Conference Board's Consumer Confidence Index rose to 52.5 in March, recovering only about half of the nearly 11 points it lost in February. Analysts expected a reading of 50 for March. February's 46.4 marked the lowest level since April 2009 and also erased three consecutive months of improvement. In January, the reading was 56.5.
One of the index's barometers, which measures how shoppers feel now about their economic situation now, rose to 26.0 from 21.7 in February. The other measurement, which gauges how shoppers feel about the economy over the next six months, ticked up to 70.2 from 62.9.
Economists watch the figures closely because consumer spending, including health care and other major items, accounts for about 70 percent of U.S. economic activity.
In a separate report, data showed home prices inched higher in January for the eighth consecutive month, helped by a strong rebound in the battered California's real estate. But the worry is that the momentum in the housing market won't be sustained.
The Standard & Poor's/Case-Shiller 20-city home price index showed prices rose 0.3 percent from December to January, the eighth consecutive monthly gain. Among the 20 cities in the index, 12 rose.
The home price index is up nearly 4 percent from its bottom in May 2009, but still almost 30 percent below its May 2006 peak. And there are signs that last year's housing rebound won't be sustained. Home sales sank during the winter, and government incentives that have propped up the market are ending.
March's confidence report appeared to confirm that February's sharp decline may have been an aberration. Many factors had dampened last month's confidence, including severe weather that had shut businesses and thwarted job searches, and a stock market hurting because of international worry about Greece's national debt.
Still, March's reading, buoyed in part by a rally in the stock market, is still a long way from the 90 that is considered healthy, and consumers remain no more optimistic than when the economic recovery started nine months ago.
"The strong headwinds of high unemployment, weak income growth and tight credit are keeping consumer confidence at very low levels," said Paul Dales, U.S. economist with Capital Economics in a report released Tuesday. Against this background, he noted that it's "hard to see households consistently spending with much vigour."
Confidence has been recovering fitfully since hitting a historic low of 25.3 in February 2009. But many economists believe it will remain well below healthy levels for at least another year or two.
"Despite the month's increase, consumers continue to express concern about current business and labor conditions," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. "And their outlook for the next six months is still rather pessimistic."
She added that overall confidence has not changed significantly since last spring, when the reading hit 40.8 in April 2009 and rose to 54.8 in May.
The confidence report came out the same day as a key home price index reported that home prices showed the smallest annual decline in almost three years in January and showed surprising pockets of strength.
While housing woes have helped to stifle a robust economic recovery, many economists say Americans won't spend dramatically more until they see clear evidence of job growth.
Economists surveyed by Thomson Reuters expect the Labor Department to report Friday that in March unemployment was steady at 9.7 percent and employers added 190,000 jobs, after shedding 36,000 in February. Most of the bump up is expected to come from temporary hiring for the Census, and economists say they need to see broad-based job creation to jolt consumers into spending.
Retailers have seen small signs since 2010 began that shoppers are spending more - trading back up to meat from pasta at the grocery store, for instance. But they still have kept many of their frugal habits that they adopted during the Great Recession.
The Conference Board survey - based on a random survey of consumers sent to 5,000 households with a cutoff date of March 23 - did show some easing of worry about the job market, but Americans are still far from optimistic.
Those saying jobs are "hard to get" declined to 45.8 percent from 47.3, while those saying jobs are "plentiful" increased to 4.4 percent from 4.0 percent. Meanwhile, the percentage of consumers expecting fewer jobs in the months ahead decreased to 21.6 percent from 24.7 percent. Those anticipating more jobs will become available over the next six months increased to 14.6 percent from 13.2 percent.
The report showed that the share expecting their income to increase improved to 10.5 percent from 10.1 percent.
In morning trading, the Dow Jones Industrials rose 31.28, or 0.3 percent, to 10,927.14.
