Confidence spikes higher
March 31, 2021
Source: The Conference Board
Consumer confidence jumped in March by 19.3 points, the most since the fall of Baghdad in 2003, to a one-year high 109.7. Both components shot up dramatically, with the expectations index hitting its highest level since mid-2019. The labor market and buying plans metrics were also improved.
Confidence never fell very far in last year’s downturn — the trough of 85.7 in April was nearly 30 points above the average low-water mark during recessions — and now stands at a level much more consistent with a mature expansion than one in its early stages. In fact, the prevailing level is north of the historical average even during the fifth and sixth years of the cycle. This expansion continues to play out in an accelerated manner owing to the unique nature of the contraction that preceded it (a supply shock rather than a demand shock) as well as the massive stimulus that helped to engender it. These same factors are also setting up a post-pandemic boom that, as yesterday’s numbers hint, is now drawing very close.
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