CONFIDENCE AT 17-YEAR LOW

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, February 26, 1992                   TAG: 9202260071
SECTION: BUSINESS                    PAGE: A5   EDITION: METRO 
SOURCE: Associated Press
DATELINE: NEW YORK                                LENGTH: Medium
CONFIDENCE AT 17-YEAR LOW
American consumer confidence dropped this month to the lowest level since the severe recession of 1974, a widely followed survey indicated Tuesday. The news disturbed economists and jolted the stock market.
The Conference Board, a business research group, said its monthly survey of con-sumer sentiment reflected fear caused by the daily barrage of layoff announcements and corporate cutbacks. More than a third of the survey respondents predicted fewer job opportunities in months ahead.
"The numbers are a very dreary assessment of the job situation, and that's where it's all at," said Fabian Linden, executive director of the Conference Board survey. "The labor world out there is very shaky."
The results offered further evidence that American consumers, whose spending is critical to a revival of the economy, are hunkering down for bleaker times.
If that attitude prevails, economists said, the downturn could last longer than previously thought. When consumers spend less, merchants sell less, factory orders decline and unemployment increases.
The Conference Board's consumer confidence index dropped from a January reading of 50.2 points to a February reading of 46.3. That is the lowest level since 43.2 in December 1974, when the nation was gripped by high unemployment and inflation.
The index, based on a 1985 adjusted baseof 100 points, is calculated from responses to questions sent to 5,000 households nationwide, covering topics that range from vacation plans to the outlook for employment and business.
Economists, who consider the index a useful tool for determining consumer mood, had been expecting the results to show an increase in confidence because of other recent signs that the economy is picking up - notably an increase in sales of homes, cars and other merchandise.
"It doesn't compute that people are as negative as they are," said Irwin Kellner, chief economist of Chemical Banking Corp. in New York.
"I don't doubt the survey, but I question why the hell are people so glum."
The Conference Board survey contributed to a rally in bond prices, which tend to strengthen on signs of economic weakness.

by Bhavesh Jinadra by CNB