By Mark Pender

NEW YORK (MNI) – The March gain in U.S. consumer confidence is not
significant and does not by itself point to a big gain for March
payrolls, according to Conference Board survey chief Lynn Franco.

“There’s not much here pointing to 200,000 payroll growth,” Franco
said in an MNI phone interview. She stresses that a 45.8% reading for
jobs hard to get, though down from a 49.4% peak in October, is still
higher than readings last spring when confidence falsely appeared to be
turning higher.

She does say the jobs-hard-to-get reading does point to incremental
improvement for the unemployment rate from February and January’s 9.7%.
Interestingly, the Conference Board itself, despite this report’s weak
readings, is looking for a consensus rise in Friday’s payroll data.

“We’re not getting any traction in confidence. We’ve been moving
sideways since May last year. We haven’t been able to sustain any
momentum,” she said.

Franco doesn’t expect the confidence report to show sustained
improvement until a few months of job growth appears. She does concede
the likelihood of a feedback effect from news on Labor Department
statistics, but she stresses that consumer attitudes are most affected
by first-hand experiences whether at the job place, in their families,
or among their neighbors: “In the end it comes down to what’s affecting
them personally.”

A central negative for her is the reading on future income where
those seeing a decrease, at 17.6%, still far outnumber those seeing an
increase, at 10.5%, in what remains this cycle’s unprecedented inversion
in more than 40 years of data.

“Consumers aren’t going to have any confidence until they see job
growth, until they see wage growth,” Franco said.

She noted gains in the stock market are a likely factor behind what
little improvement in confidence she describes for March. But she said
gains for stocks do little to alleviate the consumer’s central
questions over jobs.

Optimism in the stock market is rising with 33.2% seeing gains
ahead, up 4.6 percentage points from unusual pessimism in February.
Fewer also see declines, at 28.0% vs. February’s 31.8%. Note that
March’s improvement on this question is the best since August.

She attributes a 2-tenth rise in unadjusted inflation expectations
to 5.4% to seasonal price gains at the gas pump. She sees little concern
here, noting that the reading a year ago was 5.8%.

Buying plans remain very weak with autos falling 1.6 percentage
points to 3.8%. But here she notes this could be a contrary reading,
reflecting what may prove to be strong March sales, sales that are
removing prospective buyers.

But there remains few perspective buyers for homes, at only 2.8%,
though up a tenth from February and up from a deep low of 1.7% in
December, a month that followed the stimulus-buying spike of November.

** Market News International New York Newsroom 212-669-6430 **

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