Consumer confidence hits six-year high. Are we past the winter drag? (+video)
Consumer confidence reached its highest level since January 2008 in March, according to the Conference Board Consumer Confidence Index. It's the earliest sign that the US economy finally may be moving past the drag of a lousy winter.
It may not yet feel like it when you step outside, but there's a glimmer of hope that winter may finally be on its way out – for the US economy, at least.
Consumer confidence reached its highest level in six years this past month, according to the latest reading of The Conference Board Consumer Confidence Index, released Tuesday. The index rose to 82.3, up from 78.3 in February, and its first reading above 82 since June 2013. The report is based on a monthly survey by Nielsen, a leading analytics provider that tracks what consumers buy and watch (yes, the TV Nielsen).
"Respondents were considerably more upbeat on their economic and personal finances outlook," Chris Christopher, the director of Consumer Economics for IHS Global Insight in Lexington, Mass., writes via e-mailed analysis. "However, Americans are feeling less optimistic about their current economic circumstances."
"Overall, consumers expect the economy to continue improving and believe it may even pick up a little steam in the months ahead," Lynn Franco, director of economic insights at the Conference Board, said in a press statement.
Much of the improvement was driven by consumers' expectations of the economy's future, although perceptions of the current labor market were slightly more downtrodden than in previous months (the index's "labor market deferential," which measures the percentage of consumers who think jobs are plentiful minus the percentage who think they are hard to get, read slightly negative).
Still, "this is a good report," Mr. Christopher writes. "Currently, consumer confidence is at rather elevated levels. Consumer confidence made significant progress in March – indicating that the winter economic blues on the consumer front are somewhat behind us."
"While consumer confidence has been volatile in recent years, it has improved significantly from the levels seen during the recession," Cooper Howes, an economist with Barclays research, writes in an e-mailed analysis. "Consumer confidence should move broadly upward in the coming months as housing and labor markets continue to improve."
The news comes after months of lackluster economic reports, many of which were blamed on severe winter weather across most of the country. Sales of new single family homes, for instance, dropped to a five-month low in February, according to other data released Tuesday. In that case, as with others coming from housing in recent weeks, the bad weather may have exacerbated the slowdown caused by a run-up in mortgage rates this past summer.
On the consumer end, though, a key sign of whether or not the winter blues have passed will come this Friday, when the Commerce Department releases personal income and consumer spending numbers for February. Economists expect both to tick up slightly.