Consumers felt better about the economy – and their place in it – last month than they felt the month before. Much better. In fact, a key measure of consumer confidence reached its highest level since December 2000.
The Conference Board Consumer Confidence Index, which had increased in February, improved sharply in March.
According to the Board, the Index now stands at 125.6 (1985=100), up from 116.1 in February. The Present Situation Index rose from 134.4 to 143.1 and the Expectations Index increased from 103.9 last month to 113.8.
This means that consumers are feeling good about things right now, and optimistic about the near-term future.
Lynn Franco, Director of Economic Indicators at The Conference Board, said “Consumers’ assessment of current business and labor market conditions improved considerably. Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects.”
Consumers are expecting things to improve — and when this sentiment prevails things often do improve.
After all, this is a consumer-led economy. When consumers feel confident they spend, which leads to greater demand for goods and services and increased corporate profits. This leads to increased hiring, and corporate investment. Suddenly things really are better.
It’s a virtuous cycle.