US Consumer Confidence: Just the beginning of the rebound in consumer sentiment – Wells Fargo

Preliminary data released on Friday, showed a large-than-expected increase in consumer confidence, as measured by the University of Michigan. Analysts at Wells Fargo, expect a continuation in the upturn in consumer confidence. 

Key Quotes: 

“The University of Michigan's survey of consumer sentiment jumped to 83.0 in March. With more fiscal stimulus on the way and the tide turning with the pandemic, we fully expect a continuation of this upturn in consumer confidence. The $1.9 trillion fiscal relief package became law yesterday, and some stimulus checks will hit personal bank accounts as soon as this weekend. We would not be surprised if this were one of those months in which there is a jump between today's preliminary reading and the final number, which will print two weeks from now on March 26.”

“While the war against the virus may have reached its turning point, it is far from over. Consumer sentiment is still well-below the triple digit readings that were common prior to the pandemic. Even though key metrics are moving in the right direction, there are still tens of thousands of people falling ill to COVID every day and over a 1,000 daily deaths. Jobless claims may be falling, but there are still millions who are unemployed.”

“But turning points are notable and a growing number of indicators attest to the improvements against some of the most vexing challenges of the past 12 months. While the labor market remains under pressure, the U.S. economy added 379K jobs in February and yesterday's jobless claims report showed the second lowest figure for first time unemployment filings of the pandemic era. Today's consumer sentiment survey also showed signs of labor market improvement.”