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"The picture of business spending to start the year is fairly healthy," said Dan Greenhaus, chief global strategist at BTIG One concern is that tax increases and government spending cuts could stunt the economy's momentum. Both weighed on consumers' minds in March. The Conference Board, a New York-based private research group, said its Consumer Confidence Index fell to 59.7 this month, down from 68 in February. The decline was mainly due to a drop in expectations for the economy over the next six months, though consumers also were more pessimistic regarding current economic conditions. Some economists think the timing of the survey may have exacerbated the decline. The survey was conducted from March 1 through March 14, just as $85 billion in automatic spending cuts began. Consumers were already feeling pinched by higher Social Security taxes that have reduced take-home pay for most workers this year. And gas prices rose sharply in February, before easing slightly this month. "It was sort of a perfect storm," said Chris G. Christopher Jr., director of consumer economics at IHS Global Insight. "I do expect confidence to rebound as long as there is no government shutdown and the political bickering in Washington doesn't reach a fever pitch." A healthier job market is also likely to make people feel a little better about their finances. Employers have added an average of 200,000 jobs per month since November. That's nearly double the average from last spring. The job gains helped lower the unemployment rate in February to a four-year low of 7.7 percent. Christopher expects economic growth in the January-March quarter to rise at a 2.9 percent annual rate. That would follow a meager gain of 0.1 percent in the October-December quarter, which was largely due to temporary factors, including sharp cuts in defense spending. Naroff says the government spending cuts taking effect, known as sequestration, could reduce growth by a full percentage point this year. Still, even with the drag, he expects economic growth for 2013 to be around 2.6 percent. That would be better than the 2.2 percent growth in 2012.
[Associated
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