Tuesday, February 23, 2010
NEW YORK (AP) — Americans' outlook on the economy went into relapse in February.
Rising job worries sent a key barometer of confidence to its lowest point in 10 months, raising concerns about the economic recovery.
The Conference Board said today its Consumer Confidence Index fell almost 11 points to 46 in February, down from a revised 56.5 in January. Analysts were expecting only a slight decrease to 55. It was the lowest level since the index recorded a 40.8 reading in April 2009.
The increasing pessimism, which erased three months of improvement, is a big blow to hopes that consumer spending will power an economic recovery. Economists watch the confidence numbers closely because consumer spending accounts for about 70 percent of U.S. economic activity.
The February reading is a long way from what's considered healthy: A reading above 90 means the economy is on solid footing. Above 100 signals strong growth.
While economists said that heavy snowstorms in many areas of the country that shut down businesses dampened confidence, many believe that the report confirms that consumers aren't feeling the nascent economic recovery.
"More than six months after the recovery started, consumer confidence is still close to a record low," said Paul Ashworth, senior U.S. economist at Capital Economics Ltd. "Without a sustained acceleration in consumption growth, this recovery will eventually fade."