U.S. Consumer Confidence Index Unexpectedly Jumps To 101.3 In March

(RTTNews) - Consumer confidence in the U.S. unexpectedly rebounded in the month of March, the Conference Board revealed in a report on Tuesday, with the increase driven by an improved short-term outlook for both employment and income prospects.

The Conference Board said its consumer confidence index jumped to 101.3 in March from an upwardly revised 98.8 in February.

The increase came as a surprise to economists, who had expected the index to edge down to 95.5 from the 96.4 originally reported for the previous month.

The unexpected rebound by the headline index came as the expectations index climbed to 96.0 in March from 90.0 in February.

While the percentage of consumers expecting business conditions to improve over the next six months edged down to 16.7 percent from 17.6 percent, consumers expecting business conditions to worsen also fell to 8.0 percent from 8.9 percent.

Consumers are more optimistic about the outlook for the labor market, as those anticipating more jobs in the months ahead increased to 15.5 percent from 13.8 percent and those anticipating fewer jobs fell to 13.5 percent from 14.8 percent.

The proportion of consumers expecting growth in their incomes also improved to 18.4 percent from 16.4 percent, while the proportion expecting a drop declined to 9.9 percent from 10.8 percent.

Meanwhile, the report said the present situation index dropped to 109.1 in March from 112.1 in February, as consumers' assessment of present-day conditions turned moderately less favorable.

Consumers saying business conditions are "good" was unchanged at 26.7 percent, while those claiming business conditions are "bad" rose to 19.4 percent from 16.7 percent.

The Conference Board said consumers had a mixed assessment of the job market, as the proportion saying jobs are "plentiful" edged up to 20.6 percent from 20.3 percent, while those claiming jobs are "hard to get" also inched up to 25.4 percent from 25.1 percent.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "The strength of confidence, along with improving labor market conditions, indicates that real consumption growth will accelerate over the coming months."

"While real consumption growth will probably come in slightly below 2% annualized in the first quarter, all the conditions are in place for a sizeable acceleration in the second quarter," he added.

Last Friday, the University of Michigan released a separate report showing that consumer sentiment deteriorated by less than previously estimated in March.

The report showed that the final reading on the consumer sentiment index for March came in at 93.0 compared to the mid-month reading of 91.2.

The final reading came in above economist estimates for 92.1 but was still below the final February reading of 95.4.