Consumer confidence holds steady in March

NEW YORK (AP) — Americans seem more resigned to the hardships of the recession as consumer confidence stabilized in March after falling to an all-time low in February.

But economists caution that shoppers — dealing with shrinking retirement funds, falling home values and worries about job security — are still very gloomy and any improvement in sentiment is fragile.

“There is a sense that consumers are now familiar [with] how bad things are,” said Bernard Baumohl, chief global economist at the Economic Outlook Group. “They have read the papers. They recognize that the job market is awful.”

Some glimmers of better economic data of late helped stem further sharp declines in sentiment, which remains the lowest since at least 1967 when the index began. The Consumer Confidence Index issued Tuesday by the New York-based Conference Board edged up to 26.0 in March from a revised 25.3 reading in February. It had fallen from 37.4 in January and is less than half its level of a year ago.

But even as consumer confidence held steady, a widely watched index showed that American home prices dropped by the sharpest annual rate on record in January. The Standard & Poor’s/Case-Shiller 20-city housing index tumbled by a record 19 percent from January 2008.

Many people seem to be adjusting to the new harsh realities.

Barbara Fera, 63, a cosmetologist from Warwick, R.I., said she’s not “overspending” like she used to — buying a new jacket or purse whenever she felt like it — but also says she’s not “gonna be doom and gloom.”

Fera’s 401(k) lost money, but “time will bring that back,” she said while shopping for her grandchildren in Rhode Island’s Providence Place Mall.

Claude DeAlmeida, 40, of Fall River, Mass., expressed a calm resolve to ride out the downturn. “Every month I feel a little better about it,” he said.

An automotive technician with a wife and two girls, he said the family is cutting out extended vacations out of state this year but has made few other changes. He’s hoping that by next year, he’ll be able to cruise the Caribbean.

Economists closely monitor consumer confidence since consumer spending accounts for more than two-thirds of economic activity. The Conference Board’s consumer confidence survey sampled 5,000 U.S. households through March 24.

The latest positive signs about spending came Tuesday from the International Council of Shopping Centers-Goldman Sachs index. It showed that sales perked up for the week ended Saturday — though the retail sector has a “long road back,” noted the ICSC’s chief economist Michael P. Niemira.