Consumer confidence saw little movement in March, falling slightly from 104.8 in February to 104.7, according to the latest data from The Conference Board. This follows a large drop in February, which was a shock after January’s two-year high.
“Confidence rose among consumers aged 55 and over but deteriorated for those under 55,” said Dana M. Peterson, chief economist at The Conference Board. “Separately, consumers in the $50,000 – $99,999 income group reported lower confidence in March, while confidence improved slightly in all other income groups. However, over the last six months, confidence has been moving sideways with no real trend to the upside or downside either by income or age group.”
The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—grew from 147.6 to 151. For current business conditions, 19.5% of consumers said they were “good,” down from 20.4% last month. Meanwhile, 17.2% said business conditions were “bad,” down from 17.7% last month. For the labor market, 43.1% of consumers said jobs were “plentiful” (up from 42.8%), while 10.9% of consumers said jobs were “hard to get” (down from 12.7%).
“Consumers’ assessment of the present situation improved in March, but they also became more pessimistic about the future,” Peterson added. “Consumers remained concerned with elevated price levels, which predominated write-in responses. March’s write-in responses showed an uptick in concerns about food and gas prices, but in general complaints about gas prices have been trending downward.”
The Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—fell from 76.3 to 73.8 (1985 = 100).
As for consumers’ short-term business conditions outlook, 14.3% expect business conditions to improve (up from 14%), and 17.6% expect conditions to worsen (up from 16.9%). For the labor market outlook, 13.9% of consumers expect more jobs to be available (down from 14.1%), and 18.2% anticipate fewer jobs (up from 17.5%). For short-term income prospects, 16.5% of consumers expect their incomes to increase (up from 16.3%), and 13.8% expect a decrease (up from 11.9%).
“Indeed, average 12-month inflation expectations came in at 5.3%—barely changed from February’s four-year low of 5.2%,” Peterson concluded. “Recession fears continued to trend downward both in write-in responses and as measured by consumers’ perceived likelihood of a U.S. recession over the next 12 months. Meanwhile, consumers expressed more concern about the U.S. political environment compared to prior months.”
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