The Consumer Confidence Index rebounded in March after declining for five consecutive months, The Conference Board, New York, reports today. The Index now stands at 117.0, up from a revised 109.2 in February.
The Conference Board index, based on a monthly survey of some 5,000 U.S. households, is considered a key indicator because consumer spending accounts for about two-thirds of the nation’s economic activity. The index compares results to its base year, 1985, when it stood at 100.
”The rebound in consumer confidence was triggered by an improvement in the economic outlook for the next six months and employment prospects,” says Lynn Franco, Director of The Conference Board’s Consumer Research Center. ”The recent weakness in the stock market has done little to dampen either consumers’ assessment of present economic conditions or future expectations.”
Consumer expectations are substantially more optimistic than in February. Consumers expecting an improvement in business conditions increased from 11.3% in February to 15.4% in March. Those anticipating conditions to worsen decreased from 17.6% to 13.6%, The Conference Board reported. The employment outlook was also more favorable. Currently, 12.2% of consumers expect more jobs to become available, up from 10.8% last month. Those expecting fewer jobs to become available declined from 26.5% to 20.1%. Income expectations, however, did not improve. Only 23.2% of consumers look for their paychecks to improve, down from 23.9% in February.
Consumers’ assessment of ongoing business conditions is more positive now than in February, The Conference Board reported. The percentage of consumers who rate current business conditions as ”good” rose from 31.6% to 32.9%. Those rating conditions as ”bad” increased from 10.6% to 10.8%. Consumers claiming jobs are ”hard to get” rose from 12.4% to 12.7%. Those reporting jobs are plentiful increased from 43.3% to 43.7%.
The Expectations Index increased from 70.7 to 83.6. The Present Situation Index rose from 167.1 to 167.2.