After rising for five months straight, the Conference Board's Consumer Confidence Index plummeted in March. It fell 8.6 points to 63.4, matching December's index level. The decline isn't particularly surprising, as economists expected an even worse reading of 62.3. Still, it's the biggest drop since February 2010, which isn't a good sign for the economic recovery. Is the recovery in jeopardy?
First, here's the historical chart:
You can see that March's decline was pretty big, as it wiped away the gains in January and February. But that still leaves the index above where it stood throughout 2009 and 2010, so consumers aren't completely dejected.
Here's another way to look at the index, utilizing a trailing three-month average:
The index is often jumpy, so this helps to smooth out the trends. You can see that it had been steadily rising since last fall, but now appears to be flattening out due to the big decline in March. The trend at this point depends a lot on what happens in April. Was the drop just a blip or the start of a new trend?
Looking at the other data from the Conference Board's report might shed some light on this question. Its Expectations Index declined to 81.1 from 97.5 -- a huge drop. But meanwhile, its Present Situation Index actually improved to 36.9 from 33.8.