Consumer Confidence in U.S. Fell to a Three-Month Low in March (Bloomberg â Shobhana Chandra) Confidence among U.S. consumers dropped more than forecast in March as fuel costs surged to the highest level in more than two years. The Conference Boardâs confidence index fell to a three- month low of 63.4 from a revised 72 reading in February, figures from the New York-based private research group showed today. The median forecast of economists surveyed by Bloomberg News called for a drop this month to 65. Sentiment may remain suppressed as higher prices at gas stations and grocery stores take a bigger bite out of Americansâ incomes. A pickup in the job market and savings from tax cuts make it less likely that household spending, which accounts for about 70 percent of the economy, will falter. âConsumers are concerned about fuel costs,â Lindsey Piegza, an economist at FTN Financial in New York, said before the report. Even so, âpeople are less worried theyâll lose their job,â and âthere a feeling the economy is holding steady,â she said. Americansâ inflation expectations for the next 12 months jumped to 6.7 percent in March, the highest since October 2008, todayâs Conference Board data showed. A separate report today showed home prices fell in January by the most in a year, raising the risk that home sales will keep slowing. The S&P/Case-Shiller index of property values in 20 cities fell 3.1 percent from January 2010, the biggest year- over-year decrease since December 2009, the group said today in New York. Estimates for consumer confidence ranged from 59 to 73.5 in the Bloomberg survey of 69 economists. The measure averaged 98 during the expansion that ended in December 2007. The groupâs measure of present conditions increased to 36.9, the highest since November 2008, from 33.8 a month earlier. The gauge rose as 15.1 percent viewed current business conditions as being âgood,â up from 12.4 percent a month earlier. The share of consumers who said jobs are currently plentiful fell to 4.4 percent from 4.9 percent. Those who said jobs are hard to get was little changed at 44.6 percent from the prior month. The gauge of expectations for the next six months dropped to 81.1 from 97.5. Fewer Americans said they plan to purchase cars, homes and appliances in the next six months. The percent of respondents expecting more jobs to become available in the next six months decreased to 19.9 from 21.2 the previous month. The proportion expecting their incomes to rise over the next six months declined to 15.3 percent from 17.4 percent. âConsumersâ inflation expectations rose significantly in March and their income expectations soured, a combination that will likely impact spending decisions,â Lynn Franco, director of the Conference Boardâs consumer research center, said in a statement. âWhile the short-term future may be uncertain, the economy continues to expand.â Michaels Stores Inc., an arts-and-crafts retailer based in Irving, Texas, is among companies monitoring how consumers may respond to the higher costs for fuel and food. âWe think that the customer will be under pressure because of gasoline prices, food prices,â John Menzer, chief executive officer, said on a conference call with investors on March 24. âWe have to really look at value, value throughout our store.â Todayâs report is consistent with other confidence data. The Bloomberg Consumer Comfort Index dropped in the week ended March 20 to the lowest level since August. The final reading of the Thomson Reuters/University of Michigan confidence index fell in March to the lowest level since November 2009. Employment Gains The economy has added jobs for five consecutive months through February, when the unemployment rate fell to the lowest level since April 2009. A report due on April 1 may show March payrolls grew by 190,000, and the jobless rate held at 8.9 percent, according to the Bloomberg survey median. Americans increased spending in February by 0.7 percent, more than forecast, as incomes climbed, figures from the Commerce Department showed yesterday. More than half the gain last month was due to higher prices, indicating household spending will contribute less to the economy this quarter than in the last three months of 2010. Regular fuel rose to $3.59 a gallon on March 28, the most since October 2008, according to AAA, the nationâs biggest motoring organization. Food costs increased 0.6 percent last month, the most since 2008, consumer-price index data showed on March 17.