Conference Board consumer confidence
Despite negative news out of Chicago on the manufacturing side of the U.S. economy, consumers appear to believe the outlook is set to improve. According to the Conference Board consumer sentiment improved with its index jumping to 101.3 in March, rebounding from an upwardly revised reading of 98.8 in February.
Economists surveyed by Bloomberg anticipated no change in confidence this month. Curiously, consumers see better times by the end of the summer, while are a little cooler about the current situation. The present index eased back a little while the expectations gauge (six months’ time) rebounded. The so-called labor differential, which measures consumers’ attitude towards the labor market, remained unchanged at -4.8. This index subtracts those seeing jobs as hard to get from those who see jobs as plentiful. As the labor market improves, the number becomes less negative. By this measure the labor market is in decent shape, but arguably running on ice. What is hard to separate from the mood of consumers is whether their perceptions are affected by prospects for income or inflation. More consumers expect to see income increase in coming months (18.4 vs. 16.4) while those expecting income to decrease fell (9.9 vs. 10.8).
Consumers also expect inflation to be running at 5.2% in one year compared to 5.0% last month. They are well ahead of the muted level of actual inflation. More consumers expect to buy used autos in the next six months, while fewer expect to buy new cars. Fewer people expect to buy homes in the next six months, whether new or previously-owned. Overall, the report is a positive assessment of the health of the economy and is a comfortable rebuttal to the negative content within the Chicago manufacturing report.
Chart – Consumer confidence rose in March, as attitudes towards employment remained buoyant