Today’s Consumer Confidence report for the month of March was impressive on a lot of fronts. Besides the fact that it was the fifth biggest beat relative to expectations for the headline index since 1999 and both Present Situation and Expectations saw healthy increases, confidence levels are also now comfortably above the highs we saw during the prior expansion from 2003 through 2007. That breaks what had been a trend of lower highs in confidence that formed from the peak Consumer Confidence readings in the 1990s.
If there was one concerning aspect of the report, though, it was the factors that drove confidence levels higher. The chart below compares Consumer Confidence based on consumers with income levels of more than $50K and between $35K and $50K. As shown, while higher income Americans saw their confidence levels surge to the highest levels since late 2000, confidence among consumers with more modest incomes actually declined and has yet to exceed the peak levels we saw from the last cycle.