Consumer confidence hits highest level since pandemic

March’s consumer confidence spiked to its highest level since the pandemic took hold last year, with the The Conference Board Consumer Confidence Index rising to 109.7 from 90.4 the previous month.

“Consumers’ assessment of current conditions and their short-term outlook improved significantly, an indication that economic growth is likely to strengthen further in the coming months,”  said Lynn Franco, senior director of Economic Indicators at The Conference Board.

The boost follows passage of the $1.9 trillion American Rescue Plan, a COVID-19 relief bill that included $1,400 stimulus checks, extensions to emergency unemployment, aid to small businesses and funds for scaling up vaccination and testing efforts. 

It also included significant anti-poverty measures that will increase take-home pay for low earners and provide tax credits for parents.

Following a winter spike in COVID-19 cases, the country has seen has a significant decline in cases, hospitalizations and deaths due to COVID-19, though the case count has begun increasing again in recent days. The drop coincided with a significant ramp-up in vaccination rates.

The survey found that consumers’ assessments of the labor market were on the up and up, with more saying jobs were “plentiful” than “hard to get.” 

While overall assessments of the economy moved in a positive direction, significantly more people still said the overall economy was bad.

“Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items. However, concerns of inflation in the short-term rose, most likely due to rising prices at the pump, and may temper spending intentions in the months ahead,” Franco said. 

Opponents of huge deficit spending have warned of increased inflation, though Federal Reserve Chairman Jerome Powell has said the central bank has tools to deal with the issue should it arise.

Further stimulus may be in the offing as well. President Biden is set to unveil a multitrillion-dollar infrastructure package in Pittsburgh on Wednesday.