Summary: US consumer confidence up in March; Conference Board index increases considerably more than expected; views of present conditions, future conditions both improve significantly; economic growth “likely to strengthen” but inflation concerns harden; rise in index described as “eye-popping”, attributed to “more free money” soon to hit households.
After the GFC in 2008/09, US consumer confidence clawed its way back to neutral over a number of years and then went from strength to strength until late 2018. Measures of consumer confidence then oscillated within a fairly narrow band at historically high levels until they plunged in early 2020. Subsequent readings then fluctuated around the long-term average.
The latest Conference Board survey held during the first half of March indicated US consumer confidence improved for a third consecutive month. March’s Consumer Confidence Index registered 109.7, well above the median consensus figure of 96 and considerably higher than February’s final figure of 90.4. Consumers’ views of present conditions and future conditions both improved significantly compared to those held at the time of the previous survey.
Lynn Franco, a senior director at The Conference Board, said the figures were “an indication that economic growth is likely to strengthen further in the coming months.” However, she noted respondents disclosed greater concerns regarding short-term inflation, “most likely due to rising prices at the pump…” which “may temper spending intentions in the months ahead.”
US Treasury bond yields reacted in a haphazard fashion on the day. By the close of business, the 2-year Treasury bond yield remained unchanged at 0.14%, the 10-year yield had inched up 1bp to 1.72% while the 30-year yield finished 4bps lower at 2.37%.