NEW YORK (FNS) -- Consumer confidence roared back in March, following five straight months of steady decreases, the Conference Board here said last week.
The board attributed the rebound to perceptions of an improving labor market overshadowing recent drops in the stock market and a rash of corporate layoffs.
Fears about the economy have subsided as consumers have come to the realization that the stock market rout and declines in corporate profits have not been especially severe, said John Lonski, an economist with Moody's Investors Services here. "Consumers are not down in the dumps because of the slump in stock prices and diminished profits," he said, adding that most people are not worried about losing their jobs.
The Consumer Confidence Index, a key indicator of consumers' attitudes toward how the economy is performing, climbed 8 points in March to 117, up from a revised 109.2 in February.
"The rebound in consumer confidence was triggered by an improvement in the economic outlook for the next six months and employment prospects," said Lynn Franco, director of The Conference Board's Consumer Research Center.
"Economic reality has not been all that bad," said Sung Won Sohn, chief economist at Wells Fargo & Co., San Francisco. "We have labor shortages, as well as real income up, interest rates that are falling and a stock market that is, hopefully, in the process of bottoming out."
The biggest improvement in the monthly report came in its reading of consumer expectations for the next six months. The Expectations Index, a measure of consumer sentiment for the short term that constitutes one-half of the overall index, rose 18.2 % to 83.6 in March, from 70.7 in February.
The percentage of consumers expecting an improvement in business conditions increased to 15.4% from 11.3%. Those anticipating conditions to worsen decreased to 13.6% from 17.6%.
The employment outlook was also more favorable. Currently, 12.2% of consumers expect more jobs to become available, up from 10.8%. Income expectations, however, did not improve.
