(Agencies)
Updated: 2008-03-29 00:45

NEW YORK (Reuters) -- US consumers' confidence weakened to the lowest in 16 years in March, pointing to recession, as worries over fading job prospects and rising inflation clouded the outlook, a survey showed on Friday.

A man gestures to a 'Sale' sign in a Target Store in Chicago November 23, 2007. [Agencies]

The Reuters/University of Michigan Surveys of Consumers said its final index of confidence fell to 69.5 in March -- its lowest since February 1992, when it was at 68.8 -- from the previous month's reading of 70.8.

Economists polled by Reuters expected a reading of 70.0 in the index of confidence, which the preliminary report had said was at 70.5 in early March.

The index of consumer expectations fell to 60.1, its lowest since January 1992, when it was at 59.1. In February this year it was at 62.4.

The Reuters/University of Michigan Surveys of Consumers said in a release that "it is now nearly unanimous among consumers that the economy has already entered a recession."

"Consumer confidence slipped due to growing concerns about weakening prospects for the economy as well as anticipated increases in unemployment and inflation during the year ahead," the statement said.

The report showed the final reading on one-year inflation expectations jumped to 4.3 percent in March from 3.6 percent in February.

That was the highest final reading since October 2005, when gasoline prices were soaring in the wake of Hurricane Katrina, but was down from the preliminary March reading of 4.5 percent.

The index of consumers' economic outlook for the next 12 months fell to 46 -- the lowest since a similar reading in January 1991 -- from 54 in February.

Financial markets showed little reaction to the data. Stocks remained higher on the day, mainly benefiting from an earlier boost due to benign inflation data in the US personal income report.

The dollar was up versus the yen and the euro. Government bonds, which usually benefit from weak economic data, were mixed.