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Consumer confidence rebounds in March

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Consumer confidence rebounds in March

Consumer confidence bounced back smartly in March after slipping the previous month, edging back to a 7 1/2 year high. A closely watched index of consumers’ outlook increased to 101.3 from an uAP CONSUMER CONFIDENCE F A USA CApwardly revised 98.8 in February, the Conference Board said Tuesday, rising on a more optimistic outlook for next six months. The measure hit 103.8 in January, highest since August 2007. Economists expected a reading of 96.4 in March.

“This month’s increase was driven by an improved short-term outlook for both employment and income prospects,” said Lynn Franco, the Conference Board’s director of economic indicators. Americans’ mood generally has been lifted by average regular gasoline prices of $2.42 a gallon, well below $3.54 a year ago but up from about $2 early this year. Employment growth has been strong, with employers adding 295,000 jobs in February and 3.1 million in 2014. But annual wage growth has been mired at a sluggish 2% annual rate, keeping many consumers from splurging.

Workers may be expecting to finally see a pick-up in earnings. The portion expecting income growth rose to 18.4% from 16.4% in March. And the share of Americans expecting more jobs over the next six months increased to 15.5% from 13.8% while those anticipating fewer jobs fell to 13.5% from 14.8%.

But their view of today’s economy worsened for the second straight month. The share stating that business conditions are “bad” rose to 19.4% from 16.7%. Franco said the reading suggests “that growth may have softened in (the first quarter), and doesn’t appear to be gaining any significant momentum heading into the spring months.” Many economists estimate the economy grew well under 1% at an annual rate in the first quarter on weaker exports and business investment, as well as harsh winter weather.