Consumer confidence rebounds

Survey finds expectation for more jobs, higher incomes

A Conn’s Inc. HomePlus employee helps a customer at a store Monday in Knoxville, Tenn. A monthly measurement of consumer confidence rose in March to the highest level since before the recession started in late 2007.
A Conn’s Inc. HomePlus employee helps a customer at a store Monday in Knoxville, Tenn. A monthly measurement of consumer confidence rose in March to the highest level since before the recession started in late 2007.

WASHINGTON -- An improving job market drove U.S. consumer confidence higher in March after a dip in February, a promising sign for the economy.

The Conference Board's consumer confidence index rose to 101.3 from a revised 98.8 reading in February.

Confidence has risen to the highest levels since before the recession started in December 2007. A year ago, the index stood at 83.9.

"The strength of confidence, along with improving labor market conditions, indicates that real consumption growth will accelerate over the coming months," Paul Ashworth, chief U.S. economist at Capital Economics, wrote in a research note.

The private business group takes into account expectations for the future and consumers' assessment of current conditions. Consumers were more optimistic about the future but a little less impressed with current economic conditions.

Confidence rose for those younger than 35 and for those 55 or older. It fell for Americans 35 to 54. The percentage of consumers who expect the economy will have more jobs in six months rose to 15.5 percent from 13.8 percent in February. The share of respondents to the Conference Board's survey who said they expected their incomes to grow in the next six months increased to 18.4 percent in March from 16.4 percent the month before.

Consumers were more likely to say they would buy a car in the next six months but slightly less likely to say they intended to buy a home or major appliance, or go on vacation.

The pickup in confidence may help consumer spending, which accounts for 70 percent of the economy, to rebound after a setback earlier this year.

"It's all about the labor market," said Aneta Markowska, chief U.S. economist at Societe Generale in New York. "Clearly those prospects are very good. It seems like that weakness in spending is really temporary."

Over the past year, employers have added nearly 3.3 million jobs, the fastest 12-month pace of hiring since 1998.

Companies including Fresh Market Inc., a natural and organic grocer based in Greensboro, N.C., said low gasoline prices and an improving labor market are positive for sales. And while cheap fuel has bigger benefits for lower-income customers rather than the grocer's middle-class shoppers, "We've seen great traffic growth throughout the year," Chief Financial Officer Jeffrey Ackerman said March 25 at an industry conference.

The Commerce Department reported Monday that U.S. incomes rose a solid 0.4 percent in February, matching January's uptick, a sign that wages may be beginning to grow again after a long period of stagnation.

Consumers are certainly acting more confident: Their spending rose at a 4.4 percent annual rate from October through December, the fastest pace in eight years.

Information for this article was contributed by Paul Wiseman of The Associated Press and by Victoria Stilwell of Bloomberg News.

Business on 04/01/2015

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