Consumer confidence in U.S. decreased more than forecast

Jobs Outlook

The share of consumers expecting more jobs to become available in the next six months slumped to 12.3 percent in March, the worst reading since October 2011, from 16.1 percent in February.

The share of respondents who expect an increase in their income in the next six months fell to 13.7 percent from 15.8 percent the prior month.

The number of respondents who said jobs are currently plentiful fell to 9.4 percent in March from 10.1 percent.

Other measures of consumer confidence have been mixed. The Bloomberg Consumer Comfort monthly gauge of expectations improved to minus 4 in March from minus 7 in February, according to results of the Bloomberg Consumer Comfort Index. The weekly measure fell for the first time in seven weeks, to minus 33.9 from minus 31.6.

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment decreased in March to 71.8 from 77.6 the prior month, as Americans’ expectations deteriorated.

Payroll Tax

Darden Restaurants Inc., whose brands include the Olive Garden and Red Lobster, is among companies seeing signs of a pickup in household spending after 2 percentage-point increase in the tax that funds Social Security. The levy means Americans earning $50,000 a year are taking home about $80 less a month.

“The consumers just weren’t prepared, despite all the conversation, for the payroll tax increase, and there was a pretty rapid spike up in gasoline prices,” Clarence Otis, chairman and chief executive officer of Darden, said on a March 22 earnings call. “But March indicates that consumers have adjusted.”

A pickup in the labor market may help sustain sentiment and spending. Employers hired a net 236,000 workers last month following gains of 119,000 in January, Labor Department figures show. That helped to push the unemployment rate down to 7.7 percent, its lowest level since December 2008.

Fuel prices are also stabilizing after rising since mid- December. The price of a gallon of regular unleaded gasoline was $3.67 on March 24, down from $3.79 at the end of February, according to AAA, the largest U.S. motoring group.

Bloomberg News

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