US consumers hold back

US consumers hold back

Worries about the course of the war in Iraq and the state of the US economy are making consumers wary of spending.

A respected gauge of consumer sentiment fell to its lowest level for nearly 10 years in March.

The University of Michigan's final index of consumer sentiment fell for the third month in a row to 77.6 from 79.9 in February.

The figure was slightly better than an earlier reading and analysts said it could have been helped by optimism after the early successes of US-led forces.

The expectations index also rose from its mid-month level even though attitudes about the current state of the economy had soured.

But most of the responses for the final March survey were taken before the battle in Iraq ran into greater resistance than originally hoped for.

Analysts said that April's measure of sentiment would be a better indication of the effect on confidence of subsequent casualties and the war's slowing progress.

Focus on Iraq

The state of the economy has also been of growing concern as job losses have risen and shares have tumbled.

But economists said the developments in Iraq would remain the focus.

"What happens next likely depends greatly on the progress of the war," said Ian Shepherdson, chief US economist at High Frequency Economists.

Separate government figures showed that spending remained flat in February for the second month in a row.

And earlier this week the Conference Board's consumer confidence index for March had fallen to its lowest level for nearly 10 years.