Hopes for better spring weather plus some strength in the stock market during February no doubt helped the mood of the nation this month, as the Conference Board's Consumer Confidence would suggest. The Conference Board is a private New York City-based research organization.
On point, this closely watched sentiment survey showed an increase during March to a reading of 82.3. That number topped the upwardly revised February result of 78.3 (initially estimated at 78.1), and beat the expected results of 78.9 rather comfortably. Note that this result was for the overall confidence Index.
However, breaking the report down to its other parts, we find that the Present Situations Index edged down from 81.0 last month to 80.4 in March, while the Expectations Index, which is a more forward-looking component, surged from 76.5 to 83.5 on a month-to-month basis. This suggests that many Americans are growing more optimistic about things as we look out over the upcoming six months, or so.
All told, according to Lynn Franco, the Director of Economic Indicators at the Conference Board, "Consumer confidence improved in March, as expectations for the short-term outlook bounced back from February's decline. While consumers were moderately more upbeat about future job prospects and the overall economy, they were less optimistic about income growth." So, we see something of a mixed bag here.
Meanwhile, consumers' assessment of current conditions varied little from month to month. To wit, those claiming that business conditions were good increased from 21.2 to 22.9, which was still a very low number. But those claiming that business conditions were poor also increased, going from 22.0 in February to 23.2 this month. Again, there was no real conviction. At the same time, those claiming that jobs were plentiful decreased nominally going from 13.4 to 13.1, while those suggesting they were hard to get also increased, but just incrementally, as well, rising from 32.4 to 33.0
Overall, there weren't any dramatic changes in the components, although the composite score of 82.3 and the sharp uptick in the Expectations component were quite encouraging for the outlook going forward. We do note that this is a somewhat reactive index, as it will tend to reflect some external event, or events, such as global goings on or the performance of the equity market during the period in question. In fact confidence shifts can be sudden and sizable. - Harvey S. Katz, CFA
At the time of this article's writing, the author did not have positions in any of the companies mentioned.