Consumer Confidence Holds Up In Spite Of Tough Winter

With the hit to the economy from the severe winter, many economists feared American consumers would pull back their spending this year. But judging by the latest numbers on consumer confidence, the decline in growth in the first quarter hasn’t affected consumer attitudes much at all.

“Consumers are ready to celebrate a delayed spring with renewed spending ,” said Thomson Reuters/University of Michigan Surveys of Consumers Chief Economist Richard Curtin in the release of the group’s final March numbers.  And his optimism was backed up by the release Friday, April 11, of the April preliminary readings. The Consumer Sentiment Index rose to a nine-month high at 82.6, The Expectations and Current Economic Conditions Indexes also rose.

The Conference Board’s Consumer Confidence Index also rebounded in March, jumping to 82.3 from 78.3 in February.

“Consumer confidence has remained largely unchanged in the past three months despite the hard winter as well as a severe drought,” the UM March release stated. “The current state of consumer finances was just as strong in March as in December, and more importantly, consumers viewed their financial prospects for the year ahead much more favorably in March than at the start of the winter season.”

One positive note for restaurant sales in the data is that the financial prospects outlook has improved significantly among younger households, as 54% of those under 45 expect their situations to improve this year. Younger households were severely affected by the recession, and that has led to a significant drop in restaurant visits by such consumers, according to The NPD Group and others.