Mar 31, 2021 - Economy

Rebounding confidence suggests big March jobs number

Data: The Conference Board; Chart: Axios Visuals

Confidence is returning to U.S. consumers as the government ramps up big spending programs that are putting money directly in Americans' bank accounts and COVID-19 vaccinations increase.

Why it matters: The return of confidence itself is reassuring, but more economists also are expecting that a major increase in hiring this month is behind the improvement.

Driving the news: The Conference Board's consumer confidence index rose to its highest in a year, jumping nearly 20 points from its February level.

  • Both the present situation index and the expectations index bounced from around 90 in February to 110 in March.
  • The percentage of consumers who said jobs are "plentiful" increased to 26.3% from 21.6% last month, while those claiming jobs are "hard to get" fell to 18.5% from 22.4%.

Yes, but: Americans are much less enthusiastic about their own economic prospects — just 15.5% of consumers expect their incomes to rise in the next six months, up modestly from 14.8% in February.

  • And the number who expect their income to decrease in the next six months actually rose to 13.3%, up slightly from 12.9% last month.

What we're seeing: "The improvement in the Present Situation was also likely tied to rebounding labor market conditions," Thomas Simons, money market economist at Jefferies, said in a note.

What to watch: Simons and Jefferies' economists are expecting "a significantly stronger rebound" for jobs this month, predicting Friday's U.S. nonfarm payrolls report will show 765,000 jobs were added in March.

  • "This is corroborated by our real-time activity tracker which has shown the strongest activity since the onset of the pandemic in recent weeks in terms of travel and restaurant bookings," Simons noted.

Go big or go home: Joseph Brusuelas, chief economist at tax advisory firm RSM, is predicting the U.S. will see 1 million jobs added in March, "with a risk to the upside, as the economic recovery begins to take shape."

Of note: Wall Street economists on average are expecting a gain of 614,000 jobs, a significant increase from February's 379,000.

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