• Present situation index strengthens; expectations falter.

• Jobs are easier to find.

• Expectations for inflation surge.

The Conference Board Consumer Confidence Index during March increased 1.4% (-6.7% y/y) to 107.2 following a 4.9% February decline to 105.7, revised from 110.5. A reading of 107.5 had been expected in the Action Economics Forecast Survey.

The Present Situation Index improved 7.0% this month (28.1% y/y) to 153.0 after falling 1.0% in February to 143.0, revised from 145.1. The Consumer Expectations index declined 5.2% in March (-31.5% y/y) to 76.6, following a 9.0% February decline to 80.8, revised from 87.5. It was the third straight month of sharp decline.

The jobs gap, representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get, rose sharply to a record 47.4% and more than reversed the February decline to 41.5%. Calculated by Haver Analytics, this series has had a 69% correlation with the unemployment rate over the last ten years. The jobs plentiful measure rose this month to a record 57.2% of respondents from 53.5% in February. The jobs hard-to-get measure fell to 9.8% of respondents, the lowest level since July 2000.

Current business conditions were perceived as good by an increased 19.6% of respondents in March. Expectations that business conditions would improve in six months fell sharply to 18.7% of respondents, down from 42.5% in April 2020. More jobs were expected in six months by a lessened 17.4% of respondents, half the percentage twelve months ago. The percentage expecting rising income was little changed at 14.9% of respondents.

The expected inflation rate in twelve months surged to 7.9% in March. It remained up from a 4.4% low in January of 2020. Roughly two-thirds of respondents expected that interest rates would rise over the next twelve months, the most in three years. The share of respondents planning to buy a new home within six months held steady m/m at 0.6% and remained below a June 2020 high of 2.0%. Those planning to buy a major appliance rose to 47.4% of respondents, down from 53.9% in July 2021.

The Consumer Confidence data are available in Haver's CBDB database. The total indexes, which are indexed to 1985=100, appear in USECON, and market expectations are in AS1REPNA.

The President's Fiscal Year 2023 Budget is available here.