Consumer confidence rises on hope of better U.S. economy. Inflation still a big worry
The numbers: A survey of consumer confidence rebounded slightly in March to 104.2, reflecting ongoing strength in the labor market and a bit more hope about the future of the economy.
The closely followed index increased 0.8 points from a revised 103.4 in the prior month, the Conference Board said Tuesday. The February reading was the lowest in three months.
Economists polled by The Wall Street Journal had forecast the index to register 100.7.
Consumer confidence tends to signal whether the economy is getting better or worse. The index remains well below the levels associated with a healthy economy, however.
Key details: Consumer confidence rose in March because Americans were slightly more optimistic about the future.
A confidence gauge that looks ahead six months rose to 73 in March from a six-month low of 70.4.
Constant readings below 80, however, often signal a recession within the next year, the board said. The expectations index has hovered below that level in every month except for one in the last 13 months.
So far the economy is still in expansion mode.
A measure that looks at how consumers feel about the economy right now slipped to 151.1 from a 11-month high of 153 in February.
The consumer-confidence survey puts a lot of weight on Americans’ view of the labor market. Many companies are still hiring and the unemployment rate is near a 54-year low.
Inflation expectations, meanwhile, are still high. Americans expecting prices to rise 6.3% in the next 12 months, the same as in February.
Expectations for inflation peaked at 7.9% last summer.
Big picture: The U.S. is grappling with high inflation and rising interest rates meant to get prices back under control. Both are adding stress to the economy and it could possibly even trigger a recession later in the year.
Yet the Federal Reserve has also indicated it is close to the end of a series of rate hikes, possibly giving the economy a reprieve.
Looking ahead: “While consumers feel a bit more confident about what’s ahead, they are slightly less optimistic about the current landscape,” said Ataman Ozyildirim, senior director of economics at the board.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were mixed in Tuesday trades.
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