Consumer Confidence Surges Much Higher Than Expected

Consumer confidence soared in March to its best level in a year, the Conference Board said Tuesday.

The index of consumer confidence jumped to a reading of 109.7 from a downwardly revised 90.4 in February. Economists had forecast a milder improvement to 96.

The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—surged from 89.6 to 110.0. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—climbed from 90.9 last month to 109.6 in March.

“Consumer Confidence increased to its highest level since the onset of the pandemic in March 2020,” said 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. Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items.”

The rising price of gasoline, however, has prompted worries about inflation, Franco said.

Consumers’ assessment of the labor market brightened. The percentage of consumers saying jobs are “plentiful” increased from 21.6 percent to 26.3 percent, while those claiming jobs are “hard to get” declined from 22.4 percent to 18.5 percent.  The share expecting more jobs in the months ahead jumped from 27.4 percent to 36.1 percent, while those anticipating fewer jobs declined from 21.3 percent to 13.4 percent.

The portion of consumers claiming business conditions are “good” increased from 16.1 percent to 18.5 percent, while the share claiming business conditions are “bad” fell from 39.7 percent to 30.5 percent.  The percentage of consumers expecting business conditions will improve over the next six months rose from 30.7 percent to 40.8 percent, while those expecting business conditions will worsen declined from 17.7 percent to 11.0 percent.