WASHINGTON -- The continued decline in consumer confidence reported yesterday by the Conference Board indicates the economy is going nowhere fast, analysts say.

The business research group reported that its Consumer Confidence Index for August declined 3.2 points to 58.0, from 61.2 in July. This followed an 11. 4-point decline the previous month. The index is now at its lowest level since March.

Ian Borsook, an economist with Merrill Lynch & Co., said both the July and August declines show strong consumer pessimism. The August drop by itself is relatively unimportant, he said, but confirms that the 11.4-point decline in July, the largest in nearly a year, was not a fluke.

"From that point of view, the [August] decline is sort of disturbing," Mr. Borsook said. "I can't see any factors that can really trigger an upswing in consumer confidence until after the election."

Joseph Carson, chief economist of Dean Witter Reynolds Inc., also said he does not expect anything to shake consumers out of their siege mentality until after the presidential election in November. "You're not going to see an increase in consumer spending anytime soon," he said.

But neither economist expects the election to necessarily spur confidence. Rather, they said that is merely the earliest that consumer's expectations could turn back upward.

Mr. Carson said the battle between President Bush and Democratic challenger Bill Clinton is adding to consumer pessimism that until now was fueled primarily by a weak job market.

The candidates' starkly different economic prescriptions leave consumers feeling that the country has no clear direction, Mr. Carson said. "You can drive a truck between their plans," he said, referring to the candidates' positions regarding government spending, taxes, and free trade.

Both economists said the August decline in consumer confidence will increase pressure on the Federal Reserve to lower interest rates again. However, both said they don't expect the Fed to act until the U.S. dollar crisis is resolved. "The Fed won't do anything when markets are this volatile," Mr. Carson said.

In addition, the Conference Board reported that consumers are more negative about both current economic conditions and prospects for the future than they were last month.

"The promise of a business recovery, which was suggested by the markedly improved confidence readings recorded in the spring, has all but withered away," said Fabian Linden, executive director of the board's Consumer Research Center. "There now appears to be scant likelihood of any significant quickening in the pace of economic growth in the immediate months ahead."

So far in 1992, the index hit a low of 47.3 in February before climbing the next four months to peak at 72.6 in June. In the last two months, well over half of those gains were lost, the Conference Board reported.

"Since June, the measure of confidence has fallen by some 20%," Mr. Linden said. "The present low reading is historically associated with a lackluster economy."

The index is based on a survey of 5,000 U.S. households, including all geographic regions, age groups, and income levels, according to the Conference Board.

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