NEW YORK, United States

AMERICANS’ outlook on the economy went into relapse in February. Rising job worries sent a key barometer of confidence to its lowests. Analysts said that heavy snowstorms in many areas of the country that shut down businesses dampened confidence, many believe that the report confirms that consumers aren’t feeling the nascent economic recovery.

“More than six months after the recovery started, consumer confidence is still close to a record low,” said Paul Ashworth, senior US economist at Capital Economics Ltd.

February’s reading is well below the 61.4 figure in September 2008, when the financial crisis intensified with the collapse of Lehman Brothers. The index has had an average reading of 95.6 since the Conference Board starting tracking the figures in 1967.

“The combination of earnings and job anxieties is likely to continue to curb spending,” Lynn Franco, director of The Conference Board Consumer Research Centre, said in a statement.

The downbeat report on confidence came amid encouraging news about the housing market. According to a key housing index, also released yesterday, home prices rose for the seventh straight month in December, a sign of price stability as the US housing market continues its bumpy recovery.

The Standard & Poor’s/Case-Shiller 20-city home price index rose 0.3 per cent from November to December, to a seasonally adjusted reading of 145.87. The index was off 3.1 per cent from December last year, nearly matching analysts’ estimates that it would fall by 3.2 per cent.

But a solid job market is critical to consumers’ boosting their spending and the overall of health of the economy.

The overall economy expanded at an annual rate of 5.7 per cent in the fourth quarter, but only about one-fourth of that growth came from consumers. That marked the second quarterly increase in a row after four quarters of decreases.

Many economists expect new jobs to be created in coming months. Unemployment fell to 9.7 per cent in January from 10 per cent in December, and employers shed 20,000 jobs. But they still worry that joblessness will climb back up by next summer as unemployed people who abandoned job searches start trying again.

The results, based on a sample of 5,000 US households with cut-off date was February 17, showed consumers’ assessment of current job opportunities and job prospects over the next six months eroded.

Those saying that jobs are “hard to get” rose to 47.7 per cent from 46.5 per cent, while those saying jobs are “plentiful” decreased to 3.6 per cent from 4.4 per cent.

As for the outlook for the job market, the share of consumers expecting fewer jobs increased to 24.6 per cent from 18.9 per cent. Those anticipating more jobs will become available in the months ahead fell.

Traditionally, jobs don’t improve until after a recovery in consumer spending and confidence. But Gary Thayer, chief economist at Wells Fargo Advisors, believes that this time around, big improvements in jobs, confidence and spending will be “marching together”.

“I think shoppers are going to wait until things get better,” he said.