Measures of consumer confidence were mixed in March. According to Thomson Reuters and the University of Michigan, consumer sentiment rose by 1.3% on a monthly seasonally adjusted basis to 78.6. The final reading of consumer sentiment was revised up from the preliminary reading of 71.8 that was released earlier in the month. Conversely, the Conference Board reported that its Consumer Confidence Index fell by 12.3% on a monthly seasonally adjusted basis in March to 59.7. Consumer confidence lost most of last month’s sharp increase. The decline in the Conference Board’s measure of consumer confidence reflects eroding confidence by consumers in both their present situation and in their expectations for the future. In March, the Consumer Confidence – Present Situation Index declined by 5.8% on a seasonally adjusted monthly basis while the Consumer Confidence – Expectations Index fell by 16.0%.
The decline in consumers’ confidence in their present situation largely reflects their view of business conditions. March saw a decrease in the percentage of respondents citing business conditions as “good”. Although the decline in the portion of consumers believing that business conditions were “good” was partially offset by an increase in the share of respondents citing business conditions as “normal”, the larger increase was in the share of consumers now citing present business conditions as “bad”. Meanwhile, a growing number of consumers believed that the present employment situation was “normal”, that jobs were neither “plentiful” nor “hard to get”. A smaller share of consumers felt that jobs were “plentiful”, but the decline in this group coincided with a similar drop in the proportion of consumers that felt jobs were “hard to get”.