United States: Consumer confidence plummets as food and energy prices soar
March 25, 2011
The Reuters/University of Michigan index of consumer sentiment plummeted from a three-year high of 77.5 points in February to 67.5 points in March. On the back of the pronounced drop, consumer confidence fell to levels last observed in November 2009. Consumer sentiment deteriorated notably in March as respondents reported increasing concern about the effects of the recent rise in energy and food prices on their inflation-adjusted income. According to the chief economist of the survey, Richard Curtin, ?the data clearly indicate that the rate of real consumer spending will diminish?. Moreover, although references to employment gains still exceeded mentions of job losses, three-in-four consumers expected no additional declines in the unemployment rate in the year ahead.