American consumers shrugged off the Iran war and rising gas prices in March, pushing the Conference Board’s Consumer Confidence Index up to 91.8 from 91.0 in February — well above the 87.9 reading economists surveyed by Bloomberg had expected.
It was the second consecutive monthly increase and a sharp rebuke to forecasters who had predicted the combination of military conflict in the Middle East and surging energy costs would send confidence tumbling. The survey period ran from March 1 to 24, capturing the bulk of the initial war shock — meaning confidence didn’t merely hold steady through the conflict but actually firmed.
The gains were driven by consumers’ assessment of conditions on the ground right now. The Present Situation Index jumped 4.6 points to 123.3, as views of current business conditions swung sharply positive. The share of consumers calling business conditions “good” rose to 21.9 percent from 20.4 percent, while those calling them “bad” fell to 16.3 percent from 19.0 percent. Three of the five components of the overall index improved in March.
Labor market perceptions held firm. The closely watched jobs “plentiful” minus “hard to get” differential was essentially unchanged at 5.8 percentage points, suggesting that whatever anxieties consumers harbor about the future have not yet translated into deteriorating views of the employment picture.
The Expectations Index did slip 1.7 points to 70.9, as consumers grew slightly more cautious about future job availability and income growth. But even there, views on future business conditions were marginally less pessimistic than in February.
Consumers also showed continued willingness to spend. Auto buying plans kept rising on a six-month moving average basis, and purchase plans for home furnishings, appliances, and electronics all improved. Consumers’ views of their family’s current financial situation ticked up after retreating in February. The share of consumers planning big-ticket purchases in the next six months remained well above those saying no.
The report paints a picture of an American consumer whose footing grew more stable even as the Iran war intensified — a data point that should offer considerable reassurance to policymakers watching for signs that war-driven uncertainty is bleeding into the real economy.
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