According to Bloomberg News, US consumer confidence has surged in March, indicating that the solid growth that is taking place in the job market is offsetting the concerns Americans are having related to higher inflation, spending, and growth.
The Conference Board’s index was recorded as 105.7 in February, the lowest in one year. It escalated to 107.2 as per a report Tuesday. In a Bloomberg survey of economists, the median forecast is a reading of 107.
The surging confidence level of consumer
Although the confidence level was seen to surge, Americans are now going through the highest inflation since 1982, which is far exceeding the gains in wages and is being fueled further by the ongoing Ukrainian war. This has already caused many to curb their limit on spending for services and goods, and if there is a slowdown in buying and subsequent consumption, it will pose a risk to the growth of the economy.
The data for the inflation-adjusted spending will be made available on Thursday. A steady gain in the labor market has pushed the employment scenario back to what it was in the pre-pandemic levels in a few sectors, making the US households buoyant. About half a million jobs were added by the economy in March when the unemployment rate dropped to 3.7%, as per median projections in a Bloomberg survey much before the data released by the government Friday.
The percentage of consumers that said jobs were many increased to 57.2%, which is a record high. A separate report revealed that US job positions were near a record in February.
Bloomberg News reports that consumers were apprehensive about the prospects of short-term financial profits. That percentage of the population that felt their incomes would rise in the coming six months escalated; however, the number of people who thought their wages would drop was also seen to rise.
The Conference Board’s expectations index indicates the six-month outlook of consumers dropped to 76.6, the lowest ever since 2014.
Inflation anticipation
Concerns related to inflation became intense in March, as per the report. Consumers anticipate that the prices might rise to 7.9% in the coming year, which will be an all-time high.
A measure that indicates the home buying conditions was the lowest since November. Over the last three years, the mortgage rates have escalated to the highest level. The Federal Reserve tightens monetary policy to tame the erratic prices, making it unaffordable for many aspiring homeowners.
