The Conference Board Consumer Confidence Index® increased slightly in March to 104.2 (1985=100), up from 103.4 in February. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—decreased to 151.1 (1985=100) from 153.0 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—ticked up to 73.0 (1985=100) from 70.4 in February (a slight upward revision). However, for 12 of the last 13 months—since February 2022—the Expectations Index has been below 80, the level which often signals a recession within the next year. The cutoff date for the survey was March 20th, about ten days after the bank failures in the United States.
“Driven by an uptick in expectations, consumer confidence improved somewhat in March, but remains below the average level seen in 2022 (104.5). The gain reflects an improved outlook for consumers under 55 years of age and for households earning $50,000 and over,” said Ataman Ozyildirim, Senior Director, Economics at The Conference Board.
“While consumers feel a bit more confident about what’s ahead, they are slightly less optimistic about the current landscape. The share of consumers saying jobs are ‘plentiful’ fell, while the share of those saying jobs are ‘not so plentiful’ rose. The latest results also reveal that their expectations of inflation over the next 12 months remains elevated—at 6.3 percent. Overall purchasing plans for appliances continued to soften while automobile purchases saw a slight increase.”
In a special question this month, the Consumer Confidence Survey® asked about consumers’ spending plans on services over the next six months.
The results reveal that consumers plan to spend less on highly discretionary categories such as playing the lottery, visiting amusement parks, going to the movies, personal lodging, and dining.
However, they say they will spend more on less discretionary categories such as health care, home or auto maintenance and repair, and economical entertainment options such as streaming. Spending on personal care, pet care, and financial services such as tax preparation is also likely to be maintained.
Consumers’ assessment of current business conditions worsened in March.
- 18.4% of consumers said business conditions were “good,” up slightly from 18.0%.
- However, 19.3% said business conditions were “bad,” up from 17.4%.
Consumers’ appraisal of the labor market was less favorable.
- 49.1% of consumers said jobs were “plentiful,” down from 51.2%.
- 10.3% of consumers said jobs were “hard to get,” about the same as last month.
Expectations Six Months Hence
Consumers became slightly less pessimistic about the short-term business conditions outlook in March.
- 15.5% of consumers expect business conditions to improve, up from 14.6%.
- 18.5% expect business conditions to worsen, down from 21.6%.
Consumers’ assessment about the short-term labor market outlook was slightly more positive.
- 15.0% of consumers expect more jobs to be available, up from 14.5%.
- 19.9% anticipate fewer jobs, down from 21.2%.
Consumers’ short-term income prospects was, on balance, less upbeat.
- 14.9% of consumers expect their incomes to increase, up from 14.4% last month.
- On the contrary, 13.6% expect their incomes will decrease, up from 11.6% last month.
The monthly Consumer Confidence Survey®, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise, and panel of over 36 million consumers. The cutoff date for the preliminary results was March 20.
Source: March 2023 Consumer Confidence Survey®