The confidence of U.S. consumers was weaker than expected in March, reversing a post-government shutdown recovery in February.
The Consumer Confidence Index fell to 124.1 in March, down from 131.4 in February, the Conference Board said Tuesday.
Consumer’s assessments of the current situation and their expectations for the future both turned gloomier in the month.
“Consumer Confidence decreased in March after rebounding in February, with the Present Situation the main driver of this month’s decline,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Confidence has been somewhat volatile over the past few months, as consumers have had to weather volatility in the financial markets, a partial government shutdown and a very weak February jobs report.”
On balance, the view of the economy is still quite positive, with far more consumers viewing business conditions as good rather than bad. The percentage of consumers stating business conditions are “good” fell to 33.4 percent from 40.6 percent, while those saying business conditions are “bad” rose to 13.6 percent from 11.1 percent.
Consumers’ assessment of the labor market was less upbeat than the prior month but also remains quite positive. Those stating jobs are “plentiful” dropped from 45.7 percent to 42.0 percent, while those claiming jobs are “hard to get” increased from 11.7 percent to 13.7 percent.
“Despite these dynamics, consumers remain confident that the economy will continue expanding in the near term. However, the overall trend in confidence has been softening since last summer, pointing to a moderation in economic growth,” Franco said in a statement.
Consumers’ optimism about the short-term future dipped slightly in March. The share of consumers expecting business conditions will improve over the next six months fell from 19.6 percent to 17.7 percent, while those expecting business conditions will worsen held steady.
Consumers’ outlook for the labor market, however, was less favorable. The gap between those anticipating more jobs and those anticipating fewer narrowed, with the “more jobs” share falling from 19.0 percent to 16.4 percent while the “fewer jobs” share increased from 12.3 percent to 13.4 percent.
But the tight labor market and bouyant financial markets are boosting expectations for income. The percentage of consumers expecting an improvement rose from 20.6 percent to 21.0 percent, while the share expecting a decrease fell from 8.3 percent to 7.6 percent.