U.S. Consumer Confidence Eases in March

The Conference Board's Index of Consumer Confidence slipped 0.1% (+0.7% y/y) during March to 104.7 after falling 5.5% in February, revised from a 3.8% decline. A reading of 107.0 had been expected in the Action Economics Forecast Survey. These declines came after a 2.7% January increase and a 6.9% jump in December. The latest level remains well below the high of 137.9 in October 2018.

The Present Situations Index rose 2.3% (1.4% y/y) to 151.0 following February’s 4.7% decline and January’s 5.2% rise. The Expectations Index fell 3.3% (-0.3% y/y) to 73.8, the lowest point since October, after falling 6.4% in February and 0.5% in January.

A lessened 19.5% of respondents characterized current business conditions as good in March, below its high of 23.4% in June. Labor market readings improved this month. The jobs gap, representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get, rose to 32.2% from 30.1% in February. The reading remained below the March 2022 high of 47.1%. Calculated by Haver Analytics, this series has a 64% correlation with the unemployment rate over the last ten years. The jobs plentiful measure rose to 43.1% from 42.8% but remained below the March 2022 high of 56.7%. The jobs hard-to-get measure of 10.9% compared to 12.7% in February and a recent high of 15.6% in October. The jobs not-so-plentiful reading rose to 46.0% from 44.5% in February and remained well above its 30.5% low in September 2021.

A slightly increased 17.6% of consumers believed that business conditions in six months would worsen even as a smaller percentage of 14.3% believed they would improve. A lessened 13.9% of respondents felt there would be more jobs in six months, down from a high of 41.2% in April 2020. This remains below a recent high of 20.0% in December of 2022. A fairly steady 16.5% expected income to increase in six months, down from 18.3% in December and below a high of 19.6% in October of 2022.

The expected inflation rate in twelve months of 5.3% compared to 5.2% in February. It remained below the 7.9% high in June 2022, but above the 4.4% low in January 2020.

A sharply increased 53.2% of respondents felt that interest rates would be higher in twelve months, up from a low of 42.1% just two months ago. A fairly steady 22.3% thought they would be lower. A considerably larger 49.3% of respondents believed that stock prices would be higher in twelve months. Roughly 25% thought stock prices would be lower in twelve months versus a high of 44.7% in July of 2022. The share of respondents planning to buy a home within six months rose modestly to 4.9% but remained below the October 2022 high of 7.4%. The percentage of respondents planning to buy a major appliance fell sharply m/m to 41.2% and remained below a high of 52.4% in October 2022.

The Consumer Confidence data are available in Haver's CBDB database. The total indexes, which are indexed to 1985=100, appear in USECON, and market expectations are in AS1REPNA.

What Happens to U.S. Activity and Inflation if China’s Property Sector Leads to a Crisis? from the Federal Reserve Bank of New York can be found here.