U.S. consumers are feeling more confident in March, with a rebounding stock market brightening their outlook.
The Conference Board said Tuesday that its consumer confidence index rose to 96.2 this month after tumbling to a revised 94 in February.
Consumers’ assessment of current economic conditions has dipped. But their outlook for the future has improved modestly.
The U.S. stock market got off to a dismal start in 2016, driven by fears of economic weakness overseas and plunging oil prices. The Dow Jones industrial average had plummeted more than 10 percent this year through mid-February. It has since recovered most of those losses.
This month, 28.7 percent of consumers said they expected stocks to rise over the next year. That was up from 26.9 percent in February, the lowest share since July 2012.
“The rebound in stock markets more than offset the impact of higher gasoline prices in recent weeks,” Steve Murphy, U.S. economist at Capital Economics, wrote in a research note. Over the past month, the average U.S. price of a gallon of gasoline has risen to $2.04 from $1.75, according to AAA.
A year ago, the overall consumer confidence index stood at 101.4. But Americans have grown cautious about spending. Consumer spending grew at a meager 0.1 percent annual rate in February, the government said Monday, matching January’s unimpressive gain.
“Given the very disappointing real consumer spending results for January and February, this pickup in confidence is good news,” said Jennifer Lee, senior economist at BMO Capital Markets.
Murphy estimates that consumers’ outlook is consistent with 2.5 percent to 3 percent annual growth in spending. Consumer spending last year increased 3.1 percent.
The government said last week that the economy grew at the end of 2015 a bit faster than it had originally estimated. And employers added a healthy 242,000 jobs last month, helping keep the unemployment rate at an eight-year low 4.9 percent for a second straight month.