Consumer confidence leapt forward in March to the highest level in 16 years, according to the Consumer Confidence Survey conducted by The Conference Board by Nielsen, a provider of information and analytics around what consumers buy and watch.
The Consumer Confidence Index improved significantly in March to 125.6, up from 116.1 in February. The Present Situation Index increased from 134.4 to 143.1 and the Expectations Index increased to 113.8, up from 103.9 last month.
In 1985, the index was set to 100, representing the index's benchmark. This value is adjusted monthly based on results of a household survey of consumers' opinions on current conditions and future economic expectations. Opinions on current conditions make up 40% of the index, while expectations of future conditions make up 60%.
“Consumer confidence increased sharply in March to its highest level since December 2000,” said Lynn Franco, The Conference Board director of economic indicators. “Consumers’ assessment of current business and labor market conditions improved considerably.”
“Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects,” Franco said. “Thus, consumers feel current economic conditions have improved over the recent period, and their renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months.”
Consumers are significantly more optimistic about current conditions in March. Those saying business conditions are good increased from 28.3% to 32.2%, while those saying business conditions are bad decreased from 13.4% to 12.9%.
Consumers’ assessment of the labor market was also more positive. The percentage of consumers saying jobs are plentiful increased from 26.9% to 31.7% and those saying jobs are hard to get decreased from 19.9% to 19.5%.
Consumers were also more optimistic on the short-term outlook. Those saying business conditions will improve over the next six months increased from 23.9% to 27.1%, while those saying business conditions will worsen dropped from 10.5% to 8.4%.
And finally, consumers were more optimistic on the future of the labor market, as those expecting more jobs in the months ahead increased from 20.9% to 24.8%, while those anticipating fewer jobs decreased from 13.6% to 12.2%. The percentage of consumers expecting their incomes to go up jumped from 19.2% to 21.5% and those expecting a decrease dropped from 8.1% to 7%.