The Associated Press/Ipsos CASH Index

Washington, DC, (AP)- Consumer confidence sank during the past month, weighed down by worries about job security and concerns about local economic conditions in the months ahead. By Jeannine Aversa Associated Press Writer The Associated Press Poll is conducted by Ipsos-Public Affairs. Between April 5-7, 2004, the AP/Ipsos poll interviewed a representative sample of 1,001 adults nationwide, including 758 registered voters. The margin of error is +/- 3.1 for all adults, +/- 3.5 for registered voters. The AP-Ipsos consumer confidence index dropped to 84.8 this week, from a reading of 97.7 in early March, when Americans' feelings about the economy had shown an improvement from the previous month. The decline in consumer confidence comes as other recent economic indicators suggest the overall national economy is gaining ground and that the jobs market may be finally turning an important corner. The April consumer confidence reading was taken after the government released a report last Friday showing the nation's payrolls in March posted their biggest gains in four years. Yet some economists believe that the preceding months of fairly lackluster job growth and a political and media spotlight on the issue of U.S. jobs migrating overseas may have heightened consumers' anxiety about their own job security. "We've been saturated with the evils of offshoring jobs and that does start to color our perceptions," said Carl Tannenbaum, chief economist at LaSalle Bank. "I would have expected the level of comfort about jobs, though, would have been enhanced by the March employment report. But one month doesn't make a trend and there may still be lingering anxiety." April's confidence index reading, the lowest since early October, was a tad higher than the 83.3 registered for the same month a year ago when the economy was suffering from monthly job losses and was still struggling to get on firm footing. The AP-Ipsos confidence index is benchmarked to a 100 reading on January 2002, the month the index was started by Ipsos. Concerns about the surge in violence in Iraq and rising energy prices may be making consumers feel less optimistic about economic prospects, economists said. "The situation in Iraq is probably the biggest threat to consumer confidence," said Lynn Reaser, chief economist at Banc of America Capital Management. The economy and Iraq also are major issues in the presidential campaign. Presumptive Democratic presidential nominee John Kerry has raised questions about President Bush's handling and leadership in these areas. Bush, meanwhile, has defended his policies. A measure of consumers' feelings about the jobs climate showed the sharpest over-the-month decline of four subindexes. That "jobs" gauge dropped to 100.3 in early April, compared with 109.3 in March. The new reading was the lowest since early October. Even with the robust payroll gain of 308,000 in March, the economy still has lost a net 1.84 million jobs since January 2001, the month Bush took office. A subindex measuring consumers' feelings about economic expectations, including conditions in the local areas where they live or work, over the next six months, fell to 90.5 in early April, from a reading of 95.2 in March. A measure of consumers' feelings about current economic conditions was 94.3 in early April, down from March's reading of 96.8. The decline in both the expectations and current conditions subindexes may have been affected by concerns about the Iraq situation and higher energy prices, which don't seem to be letting up, economists said. Another gauge looking at consumers' attitudes about making a purchase, saving and other investment decisions, declined to 95.7 in early April, from 97.7 in March. That dip, too, may have been affected by higher energy bills, making some people feel they have to less to spend or save on other things, analysts said. So far, however, consumers have kept their pocketbooks and wallets sufficiently open to help the economy. Consumer spending accounts for roughly two-thirds of all economic activity in the United States and thus is an important force shaping the recovery. With tax refunds arriving in mailboxes and borrowing costs at extra-low levels, consumer spending in the first half of this year should be respectable, analysts said. They believe economic growth in the first six months of this year will average more than 4.5 percent, a healthy pace. "Despite the softness in consumer attitudes in April, consumer spending should continue at a vibrant pace," predicted Richard Yamarone, economist at Argus Research Corp. [+] click to enlarge [+] click to enlarge [+] click to enlarge The AP/Ipsos CASH Index is designed to provide a single, handy number that summarizes movement across an array of consumer attitudes, including current assessments and near-term expectations about the economy and personal finances, job security, confidence in the ability to save and invest for the future, and comfort level with making major purchases and other household purchases. Ipsos CASH Index Surveys of consumers are conducted by Ipsos Public Affairs, the Washington, D.C.-based division of Ipsos, a leading global survey-based market research group. The Ipsos Consumer Attitudes and Spending by Household (CASH) Index polls are conducted the first and third week of every month, as part of Ipsos-Public Affairs weekly omnibus polling service. The Ipsos CASH Index, started in January 2002, is a bimonthly national survey of consumer attitudes on the current and future state of the local economy, personal financial situation and spending, saving and confidence to invest.

For more information about the Ipsos CASH Index or to receive this report on the first and third week of every month, please e-mail [email protected], or contact Brian Scanlon at 202.463.2146. For more information on this press release, please contact: Thomas Riehle President, Ipsos Public Affairs Washington, D.C. 202.463.7300 About Ipsos Public Affairs Ipsos Public Affairs, headquartered in Washington D.C., is a non-partisan, objective, survey-based research company made up of campaign and political polling veterans as well as seasoned research professionals. The company conducts strategic research initiatives for a diverse number of American and international organizations, based not only on public opinion research but often elite stakeholder, corporate, and media opinion research. It has offices in New York City, Chicago, San Ramon (CA), and Washington, with affiliates around the world. Ipsos Public Affairs conducts national and international public opinion polling on behalf of The Associated Press, the world's oldest and largest news organization, and conducts the young voters poll for Newsweek.com. Ipsos Public Affairs is an Ipsos company, a leading global survey-based market research group. To learn more, visit: www.ipsos-na.com/news/pa About Ipsos Ipsos is a leading global survey-based market research company, owned and managed by research professionals. Ipsos helps interpret, simulate, and anticipate the needs and reactions of consumers, customers, and citizens around the world. Member companies assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media. They measure public opinion around the globe. Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media, and public affairs research, as well as forecasting and modeling and consulting. Ipsos has a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies. The company was founded in 1975 and has been publicly traded since 1999. In 2003, Ipsos generated global revenues of $644.2 million U.S. To learn more, visit: www.ipsos.com Ipsos is listed on the Euronext Paris Premier Marchй, and is part of the SBF 120 and Next Prime Indices as well as eligible to the Deferred Settlement System (SRD). Euroclear code 7329, Reuters ISOS.LN, Bloomberg IPS FP