Optimism in the short-term outlook in the economy contributed to an increase in consumer confidence in March. However, even as confidence is increasing, consumers are planning to spend less on highly discretionary categories, such as dining, and focus more on less discretionary categories, such as home maintenance and repair, according to the NAHB.
The Consumer Confidence Index, reported by The Conference Board, increased 0.8 points from 103.4 to 104.2 in March. The Present Situation Index fell 1.9 points from 153.0 to 151.1, and the Expectation Situation Index rose 2.6 points from 70.4 to 73.0. The Expectation Situation Index continues to be near 80 – a level associated with a recession.
Consumers were slightly less pessimistic about the short-term outlook. The share of respondents expecting business conditions to improve rose from 14.6% to 15.5%, while those expecting business conditions to deteriorate fell from 21.6% to 18.5%. Similarly, expectations of employment over the next six months were more positive. The share of respondents expecting “more jobs” increased by 0.5 percentage points to 15.0%, and those anticipating “fewer jobs” decreased by 1.3 percentage points to 19.9%.
The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home fell to 5.0% in February. The share of respondents planning to buy a newly constructed home decreased to 0.4%, while those planning to buy an existing home declined to 1.9%.
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