CONSUMER CONFIDENCE DIP CALLED ONLY A BLIP

JENNIFER OWENS

WASHINGTON -- Like a climber on a rocky mountain summit, consumer confidence has trekked up and slid down this year on its way to reaching a 30-year high in February, according to polling by the Conference Board, based in New York.

Indeed, after breaking its own record, the Consumer Confidence Index slipped slightly again in March, the most recent figures available, falling about three points to 137.4.

According to analysts who have watched the year's pattern develop, the latest dip is just a blip. That's because the index's essentially stable climb over the past 12 months has mirrored the overall health of an economy now moving toward its eighth year of growth.

Consumer confidence should only continue to ride high in the coming months, said Rosalind Wells, chief economist for the National Retail Federation here. "It's not reflecting anything wrong in the economy because there's nothing wrong with the economy," she said.

At the Conference Board's Consumer Research Center, which compiles the index from 5,000 surveys completed each month, associate director Lynn Franco noted that despite the drop the March reading is still nearly 16 points above that of a year ago, which itself was 20 points above March 1996. "There's nothing here to signal that consumers will stop spending and start saving," she said.

At the WEFA Group in Philadelphia, economist Sandra Shaber said high consumer confidence combined with other strong economic factors indicate that "consumer spending should be strong this year." Said Shaber, "Everything looks good -- unemployment is low, finally wages are rising, inflation is low. What's not to like?"

For the moment, most consumers would agree. According to the Present Situation Index -- one of two components that make up the overall index -- consumer happiness with the current economy has grown throughout the year. In March, for example, the component hit its highest mark of the year at 172.9 points -- a 28-point increase over a year ago.

That increase in the Present Situation Index has been due in large part to growing satisfaction with current business conditions: The number saying conditions are now good rose to 42.3% in March from 29.9% a year ago. Meanwhile, the impression that jobs have remained plentiful has continued to reflect the nation's sinking unemployment rates; the impression of plentiful employment rose to 44.9% in March from 33.1% a year ago.

Looking forward six months, however, the economy loses a little luster for most consumers as demonstrated by the index's second component, the Expectations Index. That index slipped from its highest peak of the past 12 months -- 114.5 in February -- to settle at 108.6 for March.

According to the survey, the reasons for slipping expectations are many -- from views on future business conditions to future job hopes to income plans.

First, business conditions: Those expecting conditions to improve started at 15.8% last March and hovered at about 19% during the fall before declining to 17.5% last month. Meanwhile, those expecting more jobs to become available rose from 13.6% last month to a high of 18.3% in June. That figure slipped, however, to 14.9% last month. Likewise, those expecting their incomes to increase during the next six months fell to 23.7% last month.