(Bloomberg) — Consumer confidence increased in March to the second-highest level since August 2007 as Americans grew more upbeat about the outlook for the labor market and incomes.
The Conference Board's sentiment index climbed to 101.3 from 98.8 in the prior month that was stronger than initially reported, the New York-based private research group said Tuesday. The median forecast in a Bloomberg survey of economists called for the gauge to hold at February's previously reported 96.4 reading.
The gain in March was paced by households who looked forward to more employment opportunities and rising incomes in the coming six months. The pickup may help consumer spending, which accounts for 70 percent of the economy, rebound after a setback earlier this year.
"It's all about the labor market," said Aneta Markowska, chief U.S. economist at Société Générale in New York, whose projection of 102 for the confidence index was the closest in the Bloomberg survey. "Clearly those prospects are very good. It seems like that weakness in spending is really temporary."
Estimates in the Bloomberg survey of 70 economists in the ranged from 93 to 102. The Conference Board's gauge averaged 96.9 during the last expansion and 53.7 during the recession that ended June 2009. In January, the index rose to 103.8, the best reading since August 2007.
Home prices
Among other reports Tuesday, home prices in 20 U.S. cities appreciated at a faster pace in the year ended in January. The S&P/Case-Shiller index increased 4.6 percent after rising 4.4 percent in the year ended in December. Nationally, prices rose 4.5 percent in the 12 months through January.
Business activity in the Chicago area shrank in March for a second month as orders and production contracted. The Institute for Supply Management-Chicago Inc.'s business barometer improved to 46.3 from 45.8 in February. Readings lower than 50 signal pullbacks.
Stocks fell, paring a ninth quarterly advance, as commodity producers slipped with the price of crude oil. The Standard & Poor's 500 Index dropped 0.3 percent to 2,080.51 at 10:51 a.m. in New York.
The Conference Board's consumer expectations gauge for the next six months increased to 96, the second-highest reading in four years, from 90 in February. The measure of present conditions dropped to 109.1 in March from 112.1 in the prior period. The share of Americans who said business conditions were good held at 26.7 percent. Labor market
The Conference Board's data showed Americans' assessments of current and future labor-market conditions improved. The share of Americans who said jobs were plentiful rose to 20.6 percent in March from 20.3 percent.
