It’s the highest level since the pandemic began, with a notable uptick in interest for big-ticket items. Of note: The component measuring current conditions improved significantly, suggesting the economy will continue to expand at least until summer.
BOSTON – The Conference Board Consumer Confidence Index surged in March, hitting its highest reading in a year after a modest increase in February.
The Index now stands at 109.7, up from 90.4 in February, an 18.8-point increase.
The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – climbed from 89.6 to 110.0 (a 20.4-point increase). The Expectations Index – based on consumers’ short-term future outlook for income, business and labor market conditions – improved from 90.9 last month to 109.6 (an 18.7-point increase).
“Consumer confidence increased to its highest level since the onset of the pandemic in March 2020,” says Lynn Franco, senior director of economic indicators at The Conference Board. “Consumers’ assessment of current conditions and their short-term outlook improved significantly, an indication that economic growth is likely to strengthen further in the coming months.”
Franco also says that March consumers had a renewed optimism for buying big-ticket items, such as homes, autos and several other items.
“However, concerns of inflation in the short-term rose, most likely due to rising prices at the pump,” she adds. That “may temper spending intentions in the months ahead.”
Current conditions: The percentage of consumers claiming business conditions are “good” increased from 16.1% to 18.5%, while the proportion claiming business conditions are “bad” fell from 39.7% to 30.5%.
Assessments of the labor market also improved. The percentage of consumers saying jobs are “plentiful” increased from 21.6% to 26.3%, while those claiming jobs are “hard to get” declined from 22.4% to 18.5%.
Future expectations: Consumers’ optimism about the short-term outlook improved considerably. The percentage of consumers expecting business conditions to improve over the next six months rose from 30.7% to 40.8%, while the proportion expecting business conditions to worsen declined from 17.7% to 11.0%.
Regarding the job market, consumers’ outlooks were also more favorable. The proportion expecting more jobs in the months ahead increased from 27.4% to 36.1%, while those anticipating fewer jobs declined from 21.3% to 13.4%.
In a closer look at short-term income prospects, 15.5% of consumers expect their incomes to increase in the next six months, up modestly from 14.8% in February. But 13.3% expect their incomes to decrease, up slightly from 12.9% last month.
The monthly Consumer Confidence Survey is based on a probability-design random sample and conducted for The Conference Board by Nielsen.
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Author: kerrys