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US consumer confidence rises to one-year high

Apr 26, 2021 United States
US consumer confidence rises to one-year high
According to data by the Conference Board, the US consumer confidence reached a one-year high in March, after a modest increase in February. This is the result of more optimism regarding the economy and the labour market
The Conference Board’s index increased to 109.7 from a revised 90.4 value in February, resulting in the sharpest one-month gain in nearly 18 years and exceeding the most optimistic forecast in economist surveys.

The Conference Board Consumer Confidence Index now stands at 109.7 (1985=100), up from 90.4 in February. The Present Situation Index - based on consumers' assessment of current business and labour market conditions - climbed from 89.6 to 110.0. The Expectations Index - based on consumers' short-term outlook for income, business, and labour market conditions - also improved, from 90.9 last month to 109.6 in March.   

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a global provider of information and analytics around what consumers buy and watch.

"Consumer Confidence increased to its highest level since the onset of the pandemic in March 2020. Consumers' assessment of current conditions and their short-term outlook improved significantly, an indication that economic growth is likely to strengthen further in the coming months. Consumers' renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items. However, concerns of inflation in the short-term rose, most likely due to rising prices at the pump, and may temper spending intentions in the months ahead", commented Lynn Franco, Senior Director of Economic Indicators at The Conference Board Consumers' assessment of current conditions improved significantly in March.

The percentage of consumers claiming business conditions are "good" increased from 16.1% to 18.5%, while the proportion claiming business conditions are "bad" fell from 39.7% to 30.5%. Consumers' assessment of the labour market also improved. The percentage of consumers saying jobs are "plentiful" increased from 21.6% to 26.3%, while those claiming jobs are "hard to get" declined from 22.4% to 18.5%.

Consumers' optimism about the short-term outlook improved considerably. The percentage of consumers expecting business conditions will improve over the next six months rose from 30.7% to 40.8%, while the proportion expecting business conditions will worsen declined from 17.7% to 11.0%. Consumers' outlook regarding the job market was also more favourable. The proportion expecting more jobs in the months ahead increased from 27.4% to 36.1%, while those anticipating fewer jobs declined from 21.3% to 13.4%. Regarding short-term income prospects, 15.5% of consumers expect their incomes to increase in the next six months, up modestly from 14.8% in February. However, 13.3% expect their incomes to decrease, up slightly from 12.9% last month.

Source: March 2021 Consumer Confidence Survey

Image credits: Hybrid on Unsplash

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