Home spending makes a strong showing
Over the next six months, 22.9 percent of consumers plan to step up their spending on household maintenance during the next six months.
That figure comes from a one-time special question included in the latest Consumer Confidence report from the New York-based think tank The Conference Board.
The only categories in which more consumers expect to spend more are travel and health care. Here is the chart:
Meanwhile, The Conference Board Consumer Confidence Index increased slightly in March to 104.2 (1985=100), up from an upwardly adjusted 103.4 in February. A year ago, the index stood at 107.6.
The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—decreased to 151.1 (1985=100) from 153.0 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—ticked up to 73.0 (1985=100) from 70.4 in February (a slight upward revision). However, for 12 of the last 13 months—since February 2022—the Expectations Index has been below 80, the level which often signals a recession within the next year. The cutoff date for the survey was March 20th, about ten days after the bank failures in the United States.
“Driven by an uptick in expectations, consumer confidence improved somewhat in March, but remains below the average level seen in 2022 (104.5). The gain reflects an improved outlook for consumers under 55 years of age and for households earning $50,000 and over,” said Ataman Ozyildirim, Senior Director, Economics at The Conference Board.
“While consumers feel a bit more confident about what’s ahead, they are slightly less optimistic about the current landscape. The share of consumers saying jobs are ‘plentiful’ fell, while the share of those saying jobs are ‘not so plentiful’ rose. The latest results also reveal that their expectations of inflation over the next 12 months remains elevated—at 6.3 percent. Overall purchasing plans for appliances continued to soften while automobile purchases saw a slight increase.”
The uptick in Consumer Confidence in March followed previously reported increases in existing. Home sales and housing starts. But like the confidence index, these metrics are down from last year’s levels.
The Conference Board also revealed:
Consumers’ assessment of current business conditions worsened in March.
• 18.4% of consumers said business conditions were “good,” up slightly from 18.0%.
• However, 19.3% said business conditions were “bad,” up from 17.4%.
Consumers became slightly less pessimistic about the short-term business conditions outlook in March.
• 15.5% of consumers expect business conditions to improve, up from 14.6%.
• 18.5% expect business conditions to worsen, down from 21.6%.