Jobs And Economy Outlook More Optimistic Among Consumers‍

As a result of more optimistic buying sentiment in the U.S. as well as an improving economy, consumer confidence surged in March, one of the best months on record.

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In a Trade Algo survey of economists, the median prediction for the Conference Board gauge was for it to fall to 101 from 103.2 in February, which was the level predicted by the majority of economists. The Conference Board gauge increased to 104.2 from 103.4 in February, data showed.

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In addition, the consumer sentiment index for the past six months rose to 73, while the current conditions index fell to 151.1, according to a measure of expectations.

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A small increase in consumer confidence in March could be attributed to an increase in expectations, but the level remains below the average of 2022, according to Ataman Ozyildirim, senior director of economics at the Conference Board. Specifically, the increase in consumer confidence is attributed to a better outlook for households with incomes over $50,000 and under 55 years of age.”

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Considering the results, which were gathered up until March 20, a little over a week after Silicon Valley Bank failed, it appears that the latest financial turmoil isn't affecting consumer confidence as much as one might expect. In spite of the concerns over high inflation and recession, a healthy job market and low unemployment remain strong and are continuing to stimulate sentiment for many Americans.

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The fact is that there have been more and more layoffs announced in recent months across a range of industries, especially the technology sector, and no doubt the sentiment may further worsen as credit conditions tighten in the wake of the banking crisis.

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While the number of respondents who said that jobs are plentiful has declined to 49.1%, the number of those saying jobs are hard to get has remained about the same as last month. The percentage of those who say jobs are hard to get is about the same as it was last month.

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For the first time since November, the difference between the two - an indicator of how tight the labor market is - has fallen for the first time since the year ended.

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According to recent survey results, consumers are planning to spend less on highly discretionary categories such as dining out and enjoying amusement parks in the next six months, while spending more on more necessary categories like health care and auto repairs over the next six months.

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In terms of larger purchases, consumers have mixed expectations. While the number of consumers planning to purchase cars and televisions increased in the month, expectations to spend on major appliances declined as well. Consumers who expect to buy a new or lived-in home continued to experience sluggish growth but that is positive.

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This is due to the fact that the Fed's preferred inflation metrics for the next 12 months are expected to show continued strength, albeit with a slowdown from January's above-forecast rise. Data will be released on Friday and are expected to show that inflation increased steadily last month.

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Earlier this week, the University of Michigan released a report on consumer sentiment for March, which includes a separate measure of consumer sentiment.