“Confidence among U.S. consumers fell to a six-week low and claims for jobless benefits rose more than forecast, highlighting the risks to the economy posed by federal government budget cuts.
The Bloomberg Consumer Comfort Index dropped to minus 34.4 in the week ended March from minus 33.9 as Americans’ views of the economy deteriorated to the lowest point since early February. Applications for unemployment insurancebenefits rose by 16,000 to 357,000 last week, the Labor Department said.
The figures represent a blemish for an economy that has shown signs of strengthening on the heels of a housing marketrebound and a pickup in manufacturing. Federal Reserve policy makers are concerned the automatic reductions in government spending that began this month may impede the progress of the expansion after a fourth-quarter slowdown.
“There will be some impact from the sequester, and certainly the second quarter should look somewhat softer than the first quarter,” said Carl Riccadonna, senior U.S. economist at Deutsche Bank Securities in New York. At the same time, “it’s domestic growth that’s driving the economy — it’s housing, it’s consumer spending, it’s business consumption.”
Stocks rose, sending the Standard & Poor’s 500 Index above its record closing level, as the reopening of banks in Cyprus helped ease concern about Europe’s debt crisis. The S&P 500 climbed 0.2 percent to 1,566.18 at 12:14 p.m. in New York.