Consumers more upbeat about economy and jobs

Washington

CONSUMER confidence rebounded more than forecast in March as American households grew more upbeat about prospects for the labour market and economy.

The Conference Board's sentiment index rose to 96.2 this month from a revised 94 reading in February that was higher than previously reported, the New York-based private research group said on Tuesday. Employment opportunities and a rebound in stock prices boosted optimism enough this month to overcome rising gasoline prices. Greater wage gains would probably help propel confidence further and make consumers more comfortable about boosting their spending after a weak start to the year.

"We've seen equity markets improving significantly, and better economic data, generally speaking," said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.

"At the end, it's all about job creation and seeing the jobless rate at an eight-year low of 4.9 per cent does wonders for consumer confidence."

The Conference Board's gauge of consumer expectations for the next six months improved to 84.7 from a revised 79.9 in February.

The proportion of consumers expecting more jobs to become available in the next six months climbed to 12.9 per cent from 12.2 per cent in February. The share anticipating improving business conditions also increased. At the same time, income expectations were slightly weaker.

The measure of present conditions decreased to 113.5 in March from a revised 115 the prior month.

"On balance, consumers do not foresee the economy gaining any significant momentum in the near-term, nor do they see it worsening," Lynn Franco, director of economic indicators at the Conference Board, said in a statement.

Stock prices have rebounded since Feb 11, when the Standard & Poor's 500 Index sank to an almost two-year low. While respondents were more upbeat about the outlook for the labour market, views were mixed about its present state.

The share who said jobs were currently plentiful jumped to 25.4 per cent in March, the highest since September 2007, from 22.8 per cent. At the same time, more also indicated that positions were harder to get.

Buying plans were mixed in March, with 11.3 per cent saying they expected to purchase a motor vehicle, down from 12.9 per cent a month earlier. The proportion planning to buy a major appliance increased, while the share expecting to purchase a home was unchanged.

Recent data have shown consumers are hesitant about loosening the purse strings.

Personal spending rose 0.1 per cent for a third month in February and the prior month's advance was revised down as Americans socked away more of their incomes, a Commerce Department report showed Monday. BLOOMBERG