American Consumer Spending Flat as Confidence Falls

01 April 2003

New reports highlight Americans’ growing caution when it comes to parting with their cash.

Latest Commerce Department figures reveal consumer spending in February was flat on January’s total, after a 2.2% decline in expenditure on durable goods (those designed to last upwards of three years). Non-durables stayed flat while services rose 0.5%.

The flat growth was attributed to poor weather, a weak job sector, stock market uncertainty, rising energy prices and war fears. Despite all that, however, consumer spending was still higher than expected: economists had feared a 0.2% decline.

Separately, the University of Michigan’s closely watched confidence index tumbled from 79.9 in February to 77.6 last month. Although this is the third consecutive monthly decline, the reading is better than feared, possibly because most of the survey was conducted during the initial phase of the war in Iraq, when it seemed conflict might be short.

Data sourced from: multiple sources; additional content by WARC staff