U.S. Consumer Confidence Improves Slightly in March

The Conference Board's Index of Consumer Confidence Index rose 0.8% (-3.2% y/y) to 104.2 during March after declining 2.5% to 103.4 in February, revised from 102.9. Despite the increase, the index remained 19.2% below its most recent peak in June 2021. A reading of 101.0 for March had been expected in the Action Economics Forecast Survey.

Performance amongst the component series remained mixed. The Expectations Index rose 3.7% (-4.8% y/y) to 73.0 following a 7.4% February decline to 70.4, revised from 69.7. The index was 34.8% below its March 2021 peak. The Present Situation Index fell 1.2% (-1.8% y/y) to 151.1 from 153.0 in February, revised from 152.8. It stood 5.3% below its June 2021 peak.

Consumers' assessment of current business conditions improved m/m as 18.4% of respondents characterized conditions as good in March versus a lessened 18.0% in February. Labor market readings deteriorated sharply this month. The jobs gap, representing the difference between respondents indicating that jobs are plentiful versus those saying jobs are hard to get, fell to 38.8% in March and reversed most of its February improvement. Calculated by Haver Analytics, this series has a 67% correlation with the unemployment rate over the last ten years. The jobs plentiful measure fell to 49.1, also reversing most of its February gain. The jobs hard to get measure was little changed at 10.3%, which was near its one-year low.

Consumers assessment of future business conditions also rose as a slightly improved 15.5% of respondents felt that conditions would get better in six months. Fifteen percent of respondents felt there would be more jobs in six months, nearly the fewest since October 2016. A modestly improved 14.9% expected income to increase in six months, down from a 19.6% high this past October.

The expected inflation rate in twelve months edged up to 6.3% from 6.2% in February. It remained below the 7.9% high in June of last year but remained higher than the 4.4% low in January 2020.

An increased 63.7% of respondents felt that interest rates would be higher in twelve months while 11.2% thought they would be lower. A lessened 29.5% of respondents thought that stock prices would be higher in twelve months and an increased 36.8% thought they would be lower.

The share of respondents planning to buy a home within six months held steady at 5.4% after plunging from 7.4% in October. It still was higher than its 4.5% low in July of last year. Those planning to buy a major appliance eased to 43.1% of respondents this month after surging to 52.4% in October. It remained above its 41.1% July low.

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.