US consumer confidence falls sharply

| Thursday February 25, 2010 00:00

The Conference Board consumer confidence index fell to a 10-month low of 46, from 56.5 in January. Analysts were expecting a decrease to 55. The report appeared to concern Wall Street. The Dow Jones closed down 101 points, or 1 percent, to 10,292.4

The data came as several US retailers reported higher profits but weak sales. For the three months to the end of January, Macy's made a profit of $466m (£302m), while Home Depot recorded a $342m profit.

Both firms had recorded losses in the same quarter a year ago. Target's profit for the quarter rose 54 percent from a year earlier to $936m, while Sears' profit more than doubled to $430m.Target was the only one of the four retailers to see growth in same-store US sales, with sales up 0.6 percent. Macy's same-store sales were down 0.8 percent, while Home Depot's were 1.1 percent lower, and Sears' lost 2.5 percent. February's consumer confidence reading from the Conference Board is well below the 61.4 figure recorded in September 2008 when the global financial crisis intensified.

And since the index started back in 1967, the average reading has been 95.6. Lynn Franco, director of the Conference Board Consumer Research Centre, said it would be some time before consumer confidence starts to recover.

'The combination of earnings and job anxieties is likely to continue to curb spending,' she said. Analyst Tom Porcelli, senior economist at RBC Capital Markets, said the report was 'flat-out bad'. 'I think if you're looking for signals for consumer spending or jobs, there are no positive signals here,' he added. (BBC)