Consumer confidence drops in February

NEW YORK (AP) _ Consumer confidence tumbled in February, as persistent worries about jobs tarnished Americans' optimism, an industry group reported Tuesday. <br><br>The Conference Board said its consumer

Tuesday, February 24th 2004, 12:00 am

By: News On 6

NEW YORK (AP) _ Consumer confidence tumbled in February, as persistent worries about jobs tarnished Americans' optimism, an industry group reported Tuesday.

The Conference Board said its consumer confidence index dropped more than nine points to 87.3, following a rise in January to a revised reading of 96.4. That reading was the index's highest since mid-2002.

Analysts had expected a decline, but the index still came in significantly below their consensus forecast for a reading of 92.

``Consumers began the year on a high note, but their optimism has quickly given way to caution,'' said Lynn Franco, director of the Conference Board's Consumer Research Center. ``Consumers remain disheartened with current economic conditions, and at the core of their disenchantment is the labor market.''

The confidence reading is followed closely because consumer spending accounts for two-thirds of the economy. Consumers who feel more upbeat about the economy are likely to spend more, while those who remain pessimistic may curb their purchases.

The dropoff in confidence reflects consumer uncertainty over both the current business climate and economic conditions in the coming six months.

In February, an index measuring consumers' assessment of current conditions dropped to 73.1 from 79.4 the previous month. Those describing the present climate as good declined to 19.3 percent from 21.9 percent in January. Those who said conditions are bad increased to 25.1 percent from 22.9 percent.

The sentiment regarding jobs was similarly depressed, with those saying positions are hard to get rising to 32.1 percent from 31.6 percent, while those saying jobs are plentiful slipped to 11.8 percent from 12.3 percent.