US consumer confidence unexpectedly rises despite inflation

[WASHINGTON] US consumer confidence unexpectedly edged up in March, suggesting solid job growth offset Americans' concerns over decades-high inflation and Russia's invasion of Ukraine.

The Conference Board's index increased to 107.2 from a downwardly revised 105.7 reading in February, which was the lowest in a year, according to the group's report on Tuesday (Mar 29). The median forecast in a Bloomberg survey of economists called for a reading of 107.

Even though confidence edged higher, Americans are facing the highest inflation since 1982, which is outpacing wage gains and being fanned further by the war in Ukraine. That's already causing some to limit their purchases of certain goods or services, and a slowdown in consumption would pose a risk to economic growth.

Inflation-adjusted spending data for February will be released on Thursday.

Still, steady labour market gains have pushed employment back to pre-pandemic levels in some sectors, buoying US households. The economy probably added close to a half million jobs in March as the unemployment rate fell to 3.7 per cent, according to the median projections in a Bloomberg survey ahead of government data on Friday.

A gauge of current conditions rose by the most since June to 153, suggesting consumers had a more upbeat assessment of business conditions and the labour market. The Conference Board's expectations index - which reflects consumers' 6-month outlook - declined to 76.6, the lowest since 2014.

A measure of home buying conditions held at the lowest since November. Mortgage rates have quickly surged to the highest level in over 3 years as the Federal Reserve tightens monetary policy to rein in spiralling prices, pushing homeownership out of reach for many aspiring buyers.

"These headwinds are expected to persist in the short term and may potentially dampen confidence as well as cool spending further in the months ahead," Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. BLOOMBERG