By Randy Tucker
The Cincinnati Enquirer

Hamilton residents Marty Collins and his mother, Bette Collins, look over a stove at the Best Buy store on Kemper Road in Springdale on Thursday. (Ernest Coleman photo) | ZOOM |

With consumer confidence at a 91/2-year low, the onset of war late Wednesday created more uncertainty in an already shaky economy.

High gasoline prices, high unemployment and the buildup period before the war already had led many consumers to keep their cars parked and pull back on spending. That spending accounts for two-thirds of the American economy and has been the main source of keeping the economy afloat during the past three years.

Now that the war has begun, even more consumers are expected to hunker down and stay glued to their television sets, watching war coverage that probably won't put them in the mood to shop, experts say.

"We call it the CNN affect," said Scott Krugman, a retail analyst with the National Retail Federation (NRF), the nation's largest retail trade group. "People will stay away from the stores, at least for a few days, while they watch the war coverage on CNN or other news channels."

But the long-term impact on retail sales and the overall economy is hard to predict.

If U.S. and British forces score a decisive victory in Iraq within weeks, as many military experts have predicted, it could result in a major boost in consumer confidence that could revive spending.

"A swift and successful conclusion to the war will lead to consumer elation, and since consumers have held back the start of their spring spending, we should see a war rebound effect," said Richard Feinberg, a professor of consumer sciences and retailing at Purdue University. "Consumers will return to the malls and stores with pent-up demand."

But a protracted conflict could push the world's biggest economy back into recession for the second time this decade. The first recession officially began in March 2001 and lasted until the end of the year.

Thursday, the New York-based Conference Board said its Index of Leading Economic Indicators dropped 0.4 percent in February to 111.1. That index measures where the overall U.S. economy is headed in the next three to six months. It stood at 100 in 1996, its base year.

Investors seem to be betting on a short conflict and have pushed stock prices up in the past six days.

But the economy is still clouded in a haze of uncertainty, keeping consumer spending on the sidelines.

"I think there are a lot of people out there waiting to spend money on spring and summer merchandise, but they're going to be wary of spending until there's some resolution to the war," the NRF's Krugman said.

Donna Spikes of Springdale was window-shopping on her lunch break Thursday near Saks Fifth Avenue in downtown Cincinnati and discussing the war with two of her co-workers. The 31-year-old administrative assistant said she's been waiting for the latest spring fashions to arrive but is reluctant to part with her cash until she knows which way the economy is headed.

"It'll be a relief to get the war over with," Spikes said. "I don't know if that means the economy will improve, but it will be one less thing to worry about."

Josh Brolin, 29, and his wife, Kathy, 30, were shopping Thursday at the Florence Mall for an Easter basket and spring clothes for their 3-year-old daughter, Tabitha. But the Erlanger couple, who have postponed plans to look for a new house and furniture, said they've been going to the mall less often.

"We're buying the gotta-have things that we need," the father said. "But with a family to think of, you just can't afford to spend money foolishly. I support the war and President Bush, but I just don't see how us winning the war is going to turn around the economy."

Experts say consumers are likely to remain tightfisted, at least until the war ends. They will continue to shop, but their shopping habits will change.

Home electronics and video rental outlets could benefit as people spend more time at home, but consumers will probably delay spending on cars, houses and other big-ticket items.

Department store retailers that depend heavily on apparel sales, such as Cincinnati-based Federated Department Stores, could also suffer.

"The war comes at a terrible time for retailers who have invested in spring and summer merchandise and Easter and spring sales," Feinberg said. "Spring sales are very important to retailers, particularly in light of very disappointing Christmas holiday retail spending. Although the war cannot be solely blamed for poor spring sales, it certainly won't help."

Confidence has plummeted to its lowest level since October 1993, according to the late-February release of the Conference Board's widely watched Consumer Confidence Index. The economy lost 308,000 jobs in February, and retail sales last month dropped 1.6 percent.

E-mail rtucker@enquirer.com