The Conference Board said that consumer sentiment rose to a six-year high. The Consumer Confidence Index increased from 78.3 in February to 82.3 in March, its highest point since January 2008. To be fair, it was not far from the 82.1 registered in June of last year before slowing in the autumn months, bottoming out at 72.0 in November in the aftermath of the government shutdown debate.
Despite the higher overall figure, the underlying data were mixed. The increase in the Consumer Confidence Index stemmed entirely from the bump-up in individuals’ outlook for the future. The expectations component increased from 76.5 to 83.5 for the month, suggesting that Americans were becoming more upbeat about the future economy. Still, this measure was below the stronger levels of optimism seen last summer, with this figure down from 89.0 in August.
In terms of the current economic climate, the index for present conditions ebbed slightly, down from 81.0 to 80.4. The longer-term trend, however, remains positive, with the index up from 70.9 in August.
Continued anxieties about the labor market were behind the reduced data for the current economy. The percentage of respondents saying that jobs were “plentiful” decreased from 13.4 percent to 13.1 percent, and at the same time, those suggesting that jobs were “hard to get” also increased from 32.4 percent to 33.0 percent. These worries carried through to income concerns, with those anticipating higher incomes in the months ahead falling from 15.8 percent to 14.9 percent. Fortunately, fewer people also predicted reductions in income, down from 13.4 percent to 12.1 percent.
Therefore, even as the headline figure reached an all-time high, it remains clear that Americans continue to be uncertain about the economy. Buying intentions were also lower for automobiles (down from 13.8 percent to 12.6 percent) and homes (down from 5.7 percent to 5.4 percent). The percentage planning to purchase new appliances, on the other hand, rose from 47.9 percent to 49.7 percent.
Chad Moutray is the chief economist, National Association of Manufacturers.