Consumer attitudes about the job market improved dramatically in the first half of March, as consumer confidence jumped to a 16-year high.
Consumers who saw jobs as “plentiful” rose to 31.7 percent from 26.9 percent in February, and those who said they are “hard to get” fell slightly to 19.5 percent from 19.9 percent, according to the Conference Board.
But one key number economists look at is the differential between jobs being plentiful and jobs seen as hard to get. That rose to 12.2 from 7 last month, the highest since August 2001. During the financial crisis and for the years after, it was negative, only turning positive last year.
JPMorgan economists tracked the number against the unemployment rate, and its improvement shows a sharp correlation to improvements in the unemployment rate. Unemployment, at 4.7 percent, is already super low.
So does this mean the government’s March jobs report will be a blowout number? Perhaps not.
“The correlation isn’t as strong for the month-over-month change in nonfarm payrolls than it is for the unemployment rate,” said Ian Lyngen, head of U.S. rates strategy at BMO.
He also noted that unemployment claims ticked up in the survey week for the government employment report. Jobless claims rose by 15,000 to 258,000 for the week ended March 18.
The Conference Board data, however, do show a pattern of improved consumer views toward jobs, their pay and business conditions.
In the March report, consumers’ outlook for the labor market improved, with consumers expecting more jobs in coming months rising to 24.8 percent from 20.9 percent. Those expecting fewer jobs fell to 12.2 percent from 13.6 percent.
The percentage of consumers expecting their incomes to increase improved from 19.2 percent to 21.5 percent, while those expecting a cut in pay fell to 7 percent from 8.1 percent
The Consumer Confidence Index rose to 125.6 in March from 116.1 in February, reaching its highest level since December 2000.