By Xavier Fontdegloria
Consumer confidence in the U.S. rose sharply in March to the highest level in a year as Americans were more optimistic on both current business and labor market conditions and the short-term outlook, data from The Conference Board showed Tuesday.
The consumer confidence index increased to 109.7 in March from a downwardly revised 90.4 in February. The reading beats economists forecasts, who polled by The Wall Street Journal expected the indicator to come in at 96.8.
March marks the third consecutive rise in consumer confidence amid Covid-19 case counts falling and millions of Americans being vaccinated on a daily basis. Many households across the country also saw a new round of stimulus checks hitting their bank accounts.
The gains in consumer confidence since the beginning of the year had been more measured than what spending data suggested and, until March's reading, had yet to meaningfully improve since its virus-related plunge. However, the index remains well below prepandemic levels, when it stood at 132.6.
"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," said Lynn Franco, senior director of economic indicators at The Conference Board.
The present situation index, which reflects consumers assessment of current business and labor market conditions, rose in March to 110.0 from 89.6 the previous month.
The expectations index, which gauges short-term outlook for income, business and labor market conditions, increased to 109.6 in March from 90.9 in February.
Consumers' renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items, Ms. Franco said. However, concerns of inflation in the short-term rose and may temper spending intentions in the months ahead, she said.
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(END) Dow Jones Newswires
March 30, 2021 10:34 ET (14:34 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.