Consumer Confidence Falls from 5-year Highs

- Consumer Confidence for March fell to 107.2 versus estimates of 108.5 and 111.2 the prior month.

BOTTOM LINE: Confidence among US consumers slid this month from a five-year high as fuel prices rose and concerns over housing rose, Bloomberg reported. However, more consumers said they saw jobs as plentiful than at any time in more than five years. The Jobs Are Plentiful component surged to 30.5% from 27.8% in February. Moreover, the present conditions component rose to 137.6, the highest since August 2001, versus 137.1 the prior month. The average price of regular gas rose to $2.58 as of March 25, the highest since last September. The Expectations component of the index fell to 86.9 from 93.8. The overall decline in consumer confidence was mostly a function of the decline in expectations, which isn’t surprising considering the media’s obsession with housing and the general lack of acknowledgment of the many positives in the current macro environment. As well, depressed Northeastern sentiment continues to skew the entire gauge, which is very interesting considering the states with the largest housing drags are not in the northeast. Here is a breakdown by region of the overall confidence readings:

Northeast Central 65.5
New England 90.6
Mid Atlantic 91.5
Northwest Central 105.80
South Atlantic 117.10
Pacific 121.50
Southeast Central 122.20
Southwest Central 130.0
Mountain 142.70

I continue to believe consumer confidence will break above recent cycle highs later this year as stocks continue to rise, housing sales stabilize at relatively high levels, interest rates remain low, inflation decelerates, gas prices fall and the job market remains healthy.