Consumer Confidence Dips But Spending On Home Improvements And Family Planning Sees Uptick: Analyst Survey

On Monday, BofA Securities highlighted its monthly consumer survey of spending expectations, which included around 1,000 respondents in the U.S. in March.

The analyst notes an improvement in signs to spend on Home Improvement over the next 3 months, which has increased to 31% vs. 27% last year and has been the highest since May 2024.

Plans to buy a New Home increased slightly from 18% to 20%, but the sentiment is still low compared to the same period in 2021-2023. Plans to have a new baby have improved from 9% to 12% and are flat compared to the 2023 level.

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The Conference Board Consumer Confidence Index fell sharply in February, declining 7.0 points to 98.3, marking the steepest drop since August 2021. This is the third consecutive monthly decline, bringing the index to the lower end of its two-year range.

The Conference Board Consumer Confidence Index is a widely watched economic indicator that measures consumer sentiment regarding the current and future state of the economy.

It is based on a monthly survey of 5,000 households, assessing perceptions of business conditions, labor markets and personal finances.

The BofA analyst notes that fewer people noticed more promotions in Electronics this March (8% vs. 10% last year), the lowest since June 2023, marking four months of decline from a peak of 13% in December 2024.

Meanwhile, more respondents say they aren’t seeing an increase in discounts overall (48% vs. 42% last year), with this trend rising since November 2024, when it was 40%.

For the next 12 months, upper and lower income respondents see grocery spending increasing. Fifty percent of lower-income respondents expect an increase, the highest level since the survey launched in December 2020.

Earlier this week, the University of Michigan’s March consumer confidence survey showed a rapid decrease in consumer confidence amid historically high inflation expectations.

The report showed an 11% monthly-over-month drop and a 22% decline from December 2024. Meanwhile, inflation expectations jumped from 4.3% in February to 4.9% in March, the highest reading since November 2022.

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