Consumer Confidence Climbs More Than Expected in March
Consumer confidence rebounded more than forecast in March as American households grew more upbeat about prospects for the labor market and economy.
The Conference Board’s sentiment index rose to 96.2 this month from a revised 94 reading in February that was higher than previously reported, the New York-based private research group said March 29. The median forecast in a Bloomberg News survey called for an increase to 94. The survey reflected responses received through March 17.
Employment opportunities and a rebound in stock prices boosted optimism enough this month to overcome rising gasoline prices. Greater wage gains probably would help propel confidence further and make consumers more comfortable about boosting their spending after a weak start to the year.
“We’ve seen equity markets improving significantly and better economic data generally speaking," Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, said before the report was released. "At the end, it’s all about job creation, and seeing the jobless rate at an eight-year low of 4.9% does wonders for consumer confidence."
Estimates in the Bloomberg survey ranged from 91 to 96.5. The Conference Board’s gauge averaged 98 in 2015.
The Conference Board’s gauge of consumer expectations for the next six months improved to 84.7 from a revised 79.9 in February.
The proportion of consumers expecting more jobs to become available in the next six months climbed to 12.9% from 12.2% in February. The share anticipating improving business conditions also increased. At the same time, income expectations were slightly weaker.
The measure of present conditions decreased to 113.5 in March from a revised 115 the prior month.
“On balance, consumers do not foresee the economy gaining any significant momentum in the near term, nor do they see it worsening,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement.
Stock prices have rebounded since Feb. 11, when the Standard & Poor’s 500 Index sank to an almost two-year low.
While respondents were more upbeat about the outlook for the labor market, views were mixed about its present state. The share who said jobs were plentiful jumped to 25.4% in March, the highest since September 2007, from 22.8%. At the same time, more also indicated that positions were harder to get.
The report is at odds with the University of Michigan’s preliminary sentiment index, which fell to a five-month low in the first half of March as rising gasoline prices tempered Americans’ views.
The average nationwide price of a gallon of gas climbed above $2 this month, up 30 cents from a seven-year low in mid-February, according to data from auto group AAA.
Buying plans were mixed in March, with 11.3% saying they expected to purchase a motor vehicle, down from 12.9% a month earlier. The proportion planning to buy a major appliance increased, while the share expecting to purchase a home was unchanged.
Another report March 29 showed home values kept appreciating in January, with prices in 20 U.S. cities rising 5.7% from a year earlier, according to S&P/Case-Shiller.
Recent data have shown consumers are hesitant about loosening the purse strings. Personal spending rose 0.1% for a third month in February ,and the prior month’s advance was revised down as Americans socked away more of their incomes, a Commerce Department report showed March 28.
Weaker sales so far in the first quarter indicate spending will do little to spur growth. The U.S. economy expanded at a 1.4% annualized rate in the final three months of 2015.
