Consumer confidence stabilized in March. The Conference Board's Consumer Confidence Index was 88.3, down 0.2 points from the revised 88.5 in February . This was above economists' expectations of 85.8. The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.
Confidence was mixed across both portions of the Conference Board index. The Present Conditions index increased by 0.8 points to 84.1 in March. This index measures how consumers perceive the current state of the economy.
The Expectations portion of the index, a measure of future economic activity, dropped to 91.0 in March from 91.9 in February.
The University of Michigan's Consumer Sentiment Index, a comparable index, gained in March, increasing to 95.8 from 94.4 in February. Each of the component indices grew. The Present Conditions index was 3.2 points higher in March at 106.8, while the Expectations portion rose slightly to 88.8 from 88.5 in February.
Consumer confidence appears to have leveled off following February's decline. Confidence may be strengthened by incoming tax refunds. Interest rates are low and there has been some household refinancing activity that may boost consumers' ability to spend.
However, there are still factors that weigh on consumer confidence. Consumers have concerns about the still slow growing labor markets, rising gasoline prices and large amounts of debt. Consumers also have little pent-up demand, which can restrict spending.
Consumer confidence is expected to gradually rise over time as the labor market strengthens and overall recovery continues, though some fluctuations are bound to occur. Since consumer spending accounts for two-thirds of the U.S. economy, consumer confidence is a closely watched economic indicator.
Note: The Conference Board data revisions for March show fairly large revisions in the index and its components for the last three months, particularly in Present Conditions, which was revised upward by 10.3 points in February.
Sources: www.conference-board.com
www.economy.com
