Consumer Confidence Dips in March But Stays Healthy
The Conference Board, New York, reported its Consumer Confidence Index decreased in March, following an increase in February that sent the Index to an 18-year high.
The Index now stands at 127.7, down from 130.0 in February. The Present Situation Index decreased from 161.2 to 159.9, while the Expectations Index declined from 109.2 last month to 106.2 this month.
“Despite the modest retreat in confidence, index levels remain historically high and suggest further strong growth in the months ahead,” said Lynn Franco, Director of Economic Indicators with The Conference Board. “Consumers’ assessment of current conditions declined slightly, with business conditions the primary reason for the moderation. Consumers’ short-term expectations also declined, including their outlook for the stock market, but overall expectations remain quite favorable.”
Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said consumers continue to show a high level of confidence, despite recent economic volatility.
“The return in stock market volatility likely played a role in the softer March readings,” Vitner said. “Consumers appear to have adjusted their expectations of stock market prices accordingly after the reintroduction of volatility we have witnessed in the past two months.”
The report said consumers’ assessment of current conditions eased in March. The percentage saying business conditions are “good” increased from 36.5 percent to 37.9 percent, however those claiming business conditions are “bad” also increased, from 11.3 percent to 13.4 percent. Consumers’ assessment of the labor market was marginally more favorable. Those claiming jobs are “plentiful” increased from 39.1 percent to 39.9 percent, while those claiming jobs are “hard to get” decreased from 15.1 percent to 14.9 percent.
Consumers were moderately less optimistic about the short-term outlook in March. The percentage of consumers anticipating business conditions will improve over the next six months decreased from 25.0 percent to 23.0 percent, while those expecting business conditions will worsen increased from 9.4 percent to 9.8 percent.
Consumers’ outlook for the job market was also less positive. The proportion expecting more jobs in the months ahead decreased from 22.4 percent to 19.1 percent, while those anticipating fewer jobs increased from 12.4 percent to 12.6 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement decreased from 23.5 percent to 22.0 percent, however, the proportion expecting a decrease also declined, from 8.6 percent to 7.2 percent.
