The US Consumer Suddenly Feels Much, Much Better

Consumer confidence came in well ahead of expectations for March on the Conference Board’s gauge, another sign that vaccine optimism and stimulus are having their intended effect.

The headline print for this month was 109.7, easily better than consensus (96.9) and higher than the most optimistic guess from five-dozen economists. The range was 88 to 103.

“Consumer Confidence increased to its highest level since the onset of the pandemic in March 2020,” Lynn Franco, Senior Director of Economic Indicators at The Conference Board, said. “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.”

As you can see (visual above) that’s a rather large MoM increase.

The Present Situation Index jumped all the way to 110 from 89.6, while the expectations gauge also rose sharply.

Labor market perceptions were much better compared to February. Specifically, the percentage of consumers who said jobs are “plentiful” rose to 26.3% from 21.6% while those who characterized jobs as “hard to get” fell almost four percentage points, to 18.5%. Just 11% expect business conditions to worsen over the next six months, versus almost 41% who expect the business environment to improve.

This bodes well for consumption, something Franco underscored. “Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items,” the release said. There were some concerns about inflation, but Franco attributed that to “rising prices at the pump.” The gas pump. Not the monetary pump.

Updating my favorite apples-to-oranges, “chart crime” shows the consumer mood catching up to equities (below).

Hopefully, that gap can continue to close in benign fashion.

It’d be “tragic” indeed if stocks were to catch down before the consumer mood can catch up.