The Conference Board's consumer confidence index is up to 104.2 in March after an upward revision to 103.4 in February (previously 102.9). The reading is above the consensus of 101.0 in an Econoday survey. The index level surprised to the upside on expectations for the near future while current conditions were perceived as weaker. Consumers continue to face inflation and higher borrowing costs, a slowing in wage growth, and an uncertain economic outlook.

The present situation index is down 1.9 points to 151.1 in March and reflects softer readings for present employment and present business conditions.

The index for six months from now is up 2.6 points to 73.0 in March. Expectations for improved conditions for employment and business more than offset a decline for expected personal income. The Conference Board noted,"However, for 12 of the last 13 months -- since February 2022 -- the Expectations Index has been below 80, the level which often signals a recession within the next year."

After two months of unexpected declines, the consumer confidence index is not expected to steady in March, instead falling further to a consensus 101.0 versus February's 102.9.

The Conference Board's confidence report surveys consumers on their assessments of the labor market, business activity, and their own financial conditions. The survey is conducted by Toluna, an online community platform. (Conference Board and Toluna)

The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer confidence index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.

Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.