Consumers Are More Positive About Overall Economy
Consumers are feeling more positive about the job market and economy, resulting in confidence levels reaching a one-year high. The National Association of Home Builders does warn high consumer confidence may be threatened by concerns about inflation in the coming months. The Consumer Confidence Index increased 19.3 points from February to March, going from 90.4 to 109.7. Present Situation Index leaped 20.4 points to 110.0 and the Expectation Index advanced to 109.6. Consumer confidence in both business conditions and the labor market increased, but consumers remain slightly skeptical about the long term.
Consumers’ assessment of current business conditions significantly improved in March. The shares of respondents rating business conditions “good” increased by 2.4 percentage points to 18.5%, while those claiming business conditions “bad” fell by 9.2 percentage points to 30.5%. Meanwhile, consumers’ assessment of the labor market was also more favorable. The share of respondents reporting that jobs were “plentiful” rose by 4.7 percentage points, while those saw jobs as “hard to get” declined by 3.9 percentage points.
Consumers were considerably more optimistic about the short-term outlook. The share of respondents expecting business conditions to improve increased from 30.7% to 40.8%, while those expecting business conditions to deteriorate decreased from 17.7% to 11.0%. Similarly, expectations of employment over the next six months improved. The share of respondents expecting “more jobs” rose by 8.7 percentage points to 36.1%, while those anticipating “fewer jobs” declined by 7.9 percentage points to 13.4%.