PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

The March Jump in Consumer Confidence

By at 31 March, 2021, 10:47 am

by Raymond J. Keating-

The Conference Board reported that its Consumer Confidence Index for March jumped to the highest level since March of last year.

The March 2021 level came in at 109.7, which marked a leap up from February’s 90.4.

The board noted: “The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—climbed from 89.6 to 110.0. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—also improved, from 90.9 last month to 109.6 in March.”

A key point for consumers obviously is the job market. Consumers saying jobs are “plentiful” moved up from 21.6 percent to 26.3 percent, while those agreeing that jobs were “hard to get” declined from 22.4 percent to 18.5 percent.

The short-term outlook improved in terms of consumer views on business and jobs:

“The percentage of consumers expecting business conditions will improve over the next six months rose from 30.7 percent to 40.8 percent, while the proportion expecting business conditions will worsen declined from 17.7 percent to 11.0 percent. Consumers’ outlook regarding the job market was also more favorable. The proportion expecting more jobs in the months ahead increased from 27.4 percent to 36.1 percent, while those anticipating fewer jobs declined from 21.3 percent to 13.4 percent.”

As I have noted before, consumers are followers. They take their cues from what business is doing, or is expected to do. In March, consumers increasingly were expecting improvements in terms of where business and hiring are headed. Let’s hope they are right.

Finally, keep in mind that in pre-pandemic February of last year, the index stood at 132.6.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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