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US consumer confidence in March climbed to its highest level in more than 16 years, as Americans took a cheerier view of current economic conditions.
The Conference Board’s consumer confidence index jumped to 125.60 in March from 116.1 the previous month, improving for the second consecutive month. It also eclipsed economists’ estimates of 114.
Consumers’ appraisal of current conditions improved considerably in March. The percentage saying business conditions are “good” increased to 32.2 per cent, from 28.2 percent. Their assessment of the labour market also improved, with the percentage of consumers saying jobs are “plentiful” rising to 31.7 per cent from 26.9 per cent.
The report showed consumers expressing a more upbeat view of the short-term outlook for business, jobs and personal income.
“This astonishing result wasn’t foreshadowed by other consumer surveys, so our first thought is that it can’t last,” said Ian Shepherdson, economist at Pantheon Macroeconomics.
“But if we’re wrong, and sentiment really is as strong as these numbers suggest, then you should expect a sharp fall in the unemployment rate over the next few months, as signalled by the 8.7-point jump in the current conditions index, and a surge in consumers’spending, as signalled by the 9.9-point leap in the expectations component,” he added.