Confidence index may point to recession

Confidence among U.S. consumers fell in March due to growing concerns about weakening prospects of the economy and anticipated increases in unemployment and inflation by the end of the year. The Reuters/University of Michigan Index of Consumer Sentiment fell to a reading of 69.5 in March, compared to a reading of 70.8 in February. That reading was the worst since 1992 and came in significantly below the 78.7 reading of March 2007. "A recession has occurred whenever the Sentiment Index has declined as much as it has fallen during the past year, including recessions occurring from the mid 1950's to the early 2000's," said Richard Curtin, director of the Reuters/University of Michigan Surveys of Consumers, according to a statement. The index of Consumer Expectations was 60.1 in March, down from the 62.4 reading in February. But below the 78.7 reading recorded in March 2007. Earlier this week, the Conference Board's index of consumer sentiment slid 11.9 points to a reading of 64.5 for the month, marking the lowest figure since March 2003 (InvestmentNews, March 25).