The latest survey of consumers regarding their sense of the economy had a pair of conflicting top-line results. Consumers sense of present conditions actually improved by a fairly significant amount, but overall confidence was down by an even greater factor, pulled down by weak expectations.
Unfortunately there is an intrinsic weakness built into the positive element of the report – even though Present Situation Index moved from 33.8 to 36.9 month-to-month, it still indicates weak consumer sentiment, since a score of 50 would indicate balance between positive and negative responses. Anything below 50 means that more consumers are troubled than not.
But the Expectations Index is well above 50, sitting at 81.1. But that number looks very weak indeed next to February’s 97.5 reading.
The baseline Conference Board Consumer Confidence Index® fell from 72.0 to 63.4.
Lynn Franco, Director of The Conference Board Consumer Research Center, commented, “The sharp decline in confidence was prompted by a sharp decline in expectations. Consumers’ inflation expectations rose significantly in March and their income expectations soured, a combination that will likely impact spending decisions. On the other hand, consumers’ assessment of current conditions improved, indicating that while the short-term future may be uncertain, the economy continues to expand.”
The employment situation remains a major problem – 44.6% say jobs are hard to get, about the same as during the prior month.
RBR-TVBR observation: For some time we’ve been getting nothing but glowing reports in this area – but now we are starting to hear a few minor chords. While the economy has emerged from the depths, it still has a long way to go before terms like robust or even healthy can be applied to it.