Ahead of the Bell: US consumer confidence

US consumer confidence likely showed small gain in March, helped by job growth

Associated Press
Consumer confidence rebounds in sign of optimism
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FILE - In this March 7, 2014, file photo, Mildred Miller pushes her cart full at the 14th Annual Wichita Adult Literacy Council Book Fair, in Wichita Falls, Texas. The Conference Board releases the Consumer Confidence Index for March on Tuesday, March, 25, 2014. (AP Photo/Wichita Falls Times Record News, Torin Halsey)

WASHINGTON (AP) -- The Conference Board reports on consumer confidence for March. The report will be released Tuesday at 10 a.m. Eastern time.

CONFIDENCE UP: The forecast is that the private group's confidence index will show a small gain in February to a reading of 78.8, according to a survey of economists by FactSet.

LABOR STRENGTH: It may be that gains in the labor market are beginning to change the outlook for many Americans.

Consumer sentiment is watched closely with consumer spending accounting for 70 percent of the nation's economic activity.

UPWARD TRAJECTORY Employers added 175,000 jobs in February, far more than the previous two months, and many private economists are forecasting more solid job gains going forward.

Many see the economy finally gaining momentum this year. The latest outlook from top forecasters at the National Association for Business Economics expect the overall economy, as measured by the gross domestic product, will expand by 3.1 percent this year. That would be a substantial increase from last year's lackluster 1.9 percent GDP growth.

If that target is reached, it would be the best performance in nine years.

An 18-month recession ended in the summer of 2009 and the recovery since that time has been achingly slow. But the tax increases and spending cuts that dragged on growth last year will be less of a factor in 2014, according to many economists, who see more vigorous activity ahead.

Faster economic growth and more robust hiring will lift consumers' spirits and power stronger consumer spending, analysts believe.

WHITE WASH: This expectation for stronger growth, however, does not include the first three months of 2014, when severe winter storms raked large parts of the country.

The NABE forecasters looked for January-March activity to expand at an annual rate of 1.9 percent but then recover to a 2.8 percent growth rate in the April-June quarter.

PUTTING AWAY THE CRUTCHES: At its December, January and March meetings, the Federal Reserve trimmed its monthly bond purchases and indicated that the economy, as it gains momentum, needs less support from the federal government through such bond purchases. Those actions have pushed down long-term interest rates, encouraging investors to remain active in the markets.

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