Consumer Confidence Fell in March

CONSUMER CONFIDENCE FELL IN MARCH, BUT REMAINS HIGH

COLUMBUS, Ohio -- The Ohio Consumer Confidence Index fell 
somewhat in March, indicating a small but growing concern about 
the economy.

The index dropped 3.5 points from its record high of 106.7 
in February to 103.1.

"Even with this drop, the March reading still represents 
strong confidence among Ohio consumers," said Lucia Dunn, a 
professor of economics at The Ohio State University.

Values over 100 in the index are considered evidence of 
strong consumer confidence.

The index is compiled monthly by Ohio State's Survey 
Research Unit to gauge Ohioans' feelings about the economy.

Dunn said the slight downturn in the index may be associated 
with Ohioans' worries about inflation.  The expected rate of 
inflation rose to 3 percent from the 2 percent level which had 
been registered since July 1997.

"People may be concerned that the Federal Reserve will raise 
interest rates in the coming months because of inflationary 
pressures," Dunn said.  "This could well dampen consumer 
confidence."

One of the largest declines in March came in consumers' 
assessment of whether they were better off than one year ago.  
The number of respondents answering that they were better off 
than a year ago fell by more than 8 percentage points.

There were also increases in the number of Ohioans who 
indicated they "don't know" or were "mixed/uncertain" about 
future business conditions.

"This indicates a growing sense of uncertainty among 
consumers about many aspects of the economy," according to Dunn.

Still, the buying mood of consumers remains bright, she 
said.

For example, about 70 percent of respondents said that now 
is still a good time to make major purchases.  The number of 
people who said it was a bad time to make major purchases 
actually fell from 7 percent to 5.3 percent.  This may be 
associated with the expectations of inflation, Dunn said.  
Consumers may feel they should buy major products now before 
prices go up.

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Contact:  Lucia Dunn, (614) 292-8071
Written by Jeff Grabmeier, (614) 292-8457