 |
||||||||
 |
||||||||
|
||||||||
|
Consumers end 2002 with grim outlook
Compiled from Times wires NEW YORK -- Consumer confidence unexpectedly fell in December as the outlook for employment worsened, energy prices rose and the stock market slumped during a period of heightened uncertainty around the globe. It was the sixth time in seven months that consumers' sentiment soured, the New York-based Conference Board reported Tuesday. The research group's Consumer Confidence Index dropped to 80.3 from a revised 84.9 in November, the only month the index rose since June. Analysts had been expecting a reading of 88.0 in December. Florida's consumer confidence index likewise fell sharply in December. Using a different scale than the Conference Board's, the index was 86 compared to 90 in November. Chris McCarty, director of the University of Florida Survey Research Center, which compiles the report, said the most recent results followed an 8-point gain in November. The December survey showed Floridians were especially concerned about their personal finances and U.S. business conditions in the short term. Florida's seniors also reported increased pessimism. McCarty said that while the country may not be in a recession or even heading toward one, the economy is still weak and shows no definitive signs of recovery. "The primary thing to watch in 2003 is business confidence and investment," he said. "Barring a prolonged and expensive military engagement in Iraq, business investment should start to recover by July or August." Lynn Franco, director of the Conference Board's consumer research center, said "the major factor dampening consumers' spirits has been the rising unemployment rate and the discouraging job outlook." "Weak retail sales over the holidays clearly reflect the current mood of consumers," Franco said. "Until there is an improvement in labor market conditions, there is not likely to be a significant upturn in consumer confidence." Nationwide unemployment was 6 percent in November, matching an eight-year high set in April, and some economists think it could rise as high as 6.5 percent by the middle of 2003. While this holiday season is expected to be the weakest in more than 30 years in terms of sales growth, the Conference Board data show that consumers do not plan to tighten their purse strings. The percentage of people who plan to buy automobiles, TV sets and washing machines within 6 months increased in December, compared with November. "Nobody feels good, yet everybody's out buying things," said Watt. "There is definitely a disconnect between the way people feel and the way they're acting." The Conference Board's index, based on a monthly survey of some 5,000 U.S. households, is closely watched because consumer confidence drives consumer spending, which accounts for about two-thirds of the nation's economic activity. The index compares results to its base year, 1985, when it stood at 100. The drop in consumer confidence put investors in a sour mood Tuesday, sending stocks moderately lower in Wall Street's last trading session of 2002. Trading was light the day before New Year's, when the stock market will be closed. Stocks were ending their third-straight losing year, a feat not seen since the period ended 1941. "The market took a bit of a dive when the consumer confidence numbers were released," said Charles G. Crane, strategist for Victory SBSF Capital Management. "That splashed a little more cold water on a market already feeling somewhat blue." -- Information from the Associated Press and Times staff writer Kris Hundley was used in this report.
 © 2006 • All Rights Reserved • St. Petersburg Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111 
|
From the Times Business report
From the AP
|
