US consumer confidence rebounds a little in March

US consumer confidence rebounded slightly in March, according to a survey released on Tuesday.

The Conference Board’s consumer confidence index ticked up to 107.2 from a revised 105.7 in February, in line with expectations and following declines in January and February.

Meanwhile, the present situation index, which is based on consumers’ assessment of current business and labour market conditions, rose to 153.0 from 143.0 last month. But the expectations index, based on the short-term outlook for income, business, and labour market conditions, fell to 76.6 from 80.8.

Lynn Franco, senior director of Economic Indicators at the Conference Board, said: "The present situation index rose substantially, suggesting economic growth continued into late Q1. Expectations, on the other hand, weakened further with consumers citing rising prices, especially at the gas pump, and the war in Ukraine as factors.

"Meanwhile, purchasing intentions for big-ticket items like automobiles have softened somewhat over the past few months as expectations for interest rates have risen.

"Nevertheless, consumer confidence continues to be supported by strong employment growth and thus has been holding up remarkably well despite geopolitical uncertainties and expectations for inflation over the next 12 months reaching 7.9% - an all-time high. However, these headwinds are expected to persist in the short term and may potentially dampen confidence as well as cool spending further in the months ahead."

Mahir Rasheed, US economist at Oxford Economics, said: "With inflation remaining the primary irritant for consumers, confidence won't make much headway until the stubborn imbalance between supply and demand recalibrates later this year.

"A hawkish determination from the Fed to restore price stability will pose an additional headwind to confidence as growth slows and interest rates rise, though a strong labour market outlook and stable health conditions should prevent attitudes from worsening significantly."