Consumer confidence rose slightly following two months of declines thanks to the optimism in the short-term outlook. Even though confidence rose in March, consumers are planning to spend less on highly discretionary categories such as concerts and dining. As a result, consumers are planning to spend more on less discretionary categories such as home maintenance and repair.
The Consumer Confidence Index, reported by The Conference Board, increased 0.8 points from 103.4 to 104.2 in March. The Present Situation Index fell 1.9 points from 153.0 to 151.1, and the Expectation Situation Index rose 2.6 points from 70.4 to 73.0. The Expectation Situation Index continues to be near 80 – a level associated with a recession.
Consumers’ assessment of current business conditions declined in March. The share of respondents rating business conditions “good” rose by 0.4 percentage points to 18.4%. The share claiming business conditions “bad” rose by 1.9 percentage points to 19.3%. Meanwhile, consumers’ assessment of the labor market was also less favorable. The share of respondents reporting that jobs were “plentiful” fell by 2.1 percentage points to 49.1%, while those saw jobs as “hard to get” remained unchanged at 10.3%.
Consumers were slightly less pessimistic about the short-term outlook. The share of respondents expecting business conditions to improve rose from 14.6% to 15.5%, while those expecting business conditions to deteriorate fell from 21.6% to 18.5%. Similarly, expectations of employment over the next six months were more positive. The share of respondents expecting “more jobs” increased by 0.5 percentage points to 15.0%, and those anticipating “fewer jobs” decreased by 1.3 percentage points to 19.9%.
The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home remained at 5.4% in March. The share of respondents planning to buy a newly constructed home increased to 0.8%, while for those who planning to buy an existing home increased to 2.5%.