Consumer Confidence Retreats in March

Consumer confidence dipped slightly in March, but the three-month moving average continued to advance, according to The Conference Board’s Consumer Confidence Survey. The composite value of consumer confidence in February was 127.7, down from 130.0 in February. The three-month moving average (3MMA) increased from 125.8 in February to 127.3 in March, which was 9.8 points higher than in March last year. Consumer confidence is a driver of consumer spending, which is the largest component of GDP and ultimately drives a large portion of steel consumption.

In March, the 3MMA of the composite increased by 1.53 points to 127.3 points. We prefer to smooth the data with a moving average because of monthly volatility, which in the case of consumer confidence has been quite extreme since the beginning of 2016. The composite index is made up of two sub-indexes. These are the consumer’s view of the present situation and his or her expectations for the future. Both are now above their nine-year trend line (Figure 1).