Confidence among U.S. consumers fell more than forecast in March as Washington’s budget battle soured Americans’ views of the economic outlook.
The Conference Board’s index declined to 59.7 from a revised three-month high of 68 in February, data from the New York-based private research group showed today. Economists surveyed by Bloomberg projected the March measure would fall to 67.5.
Concern mounted that sweeping cuts in planned government spending may hinder the expansion and limit recent progress in the labor market. At the same time, record stock prices and a housing rebound that’s helping shore up household balance sheets may support consumer spending that accounts for about 70 percent of the economy.
“So far the consumer has been fairly resilient, but I think the impact of higher taxes is still to come,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “Some of the brinkmanship in Washington over the last few months may dampen consumers’ expectations.”
Economists at Moody’s Analytics are the most accurate consumer-confidence forecasters in the last two years, according to data compiled by Bloomberg.
Forecasts of 79 economists surveyed by Bloomberg ranged from 60 to 72. The measure averaged 53.7 in the recession that ended in June 2009.
Another report today showed home prices in 20 U.S. cities jumped in the 12 months to January by 8.1 percent, the biggest year-to-year gain since June 2006 and a sign the housing-market recovery is strengthening. The S&P/Case-Shiller index of property values climbed 1 percent from December.
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