Consumer Confidence Ramps Higher, With Brighter Expectations Ahead

It turns out that the recovery in the stock market and the end of the panic of the first six weeks of 2016 has led to a gain in consumer confidence. The Conference Board reported that consumer confidence rose to 96.2 in March.

Bloomberg was calling for the consensus estimate to be only 94.0, and Reuters mirrored Bloomberg on its consensus. The cutoff date for the preliminary results was March 17.

An issue that stands out is that the February initial read of 92.2 was revised higher to 94.0.

One thing that is also better than in past reports is that the expectations are looking better than the “today” readings. The Conference Board said that the Present Situation Index declined moderately from 115.0 in February to 113.5 in March. What gained handily was the Expectations Index, rising from 79.9 in February to 84.7 in March.
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The Conference Board’s statement said:

Consumer confidence increased in March, after declining in February. Consumers’ assessment of current conditions posted a moderate decline, while expectations regarding the short-term turned more favorable as last month’s turmoil in the financial markets appears to have abated. On balance, consumers do not foresee the economy gaining any significant momentum in the near-term, nor do they see it worsening.

Consumers’ appraisal of current conditions eased in March:

• Those saying business conditions were “good” fell from 26.5% to 24.9%.
• Those saying business conditions are “bad” ticked lower from 19.0% to 18.8%.

Consumers’ appraisal of the labor market was mixed:

• Those claiming jobs are “plentiful” rose from 22.8% to 25.4%.
• Those claiming jobs are “hard to get” also rose to 26.6% from 23.6%.

Consumers were more optimistic about the short-term outlook than in February:

• The percentage of consumers expecting business conditions to improve over the next six months ticked higher from 14.5% to 15.0%.
• Those expecting business conditions to worsen fell from 11.6% to 9.2%.

Consumers’ outlook for the labor market for jobs and income was also more favorable:

• Those anticipating more jobs in the months ahead increased slightly from 12.2% to 12.9%.
• Those anticipating fewer jobs fell from 17.7% to 16.3%.
• The proportion of consumers expecting their incomes to increase declined moderately from 17.7% to 17.2%.
• The proportion expecting a reduction in income ticked higher from 11.6% to 11.8%.