The first of the March data released last week exceeded even the most optimistic forecasts.
Any doubts as to whether the February economic data was primarily a function of the winter weather was put to rest last week, as all the data released was well above consensus expectations. It started with the Conference Board’s consumer confidence index. It was expected to be up modestly to 96.5 from February’s 90.4. It came in at 109.7, a 21.3% increase. It is still 7.7% below last March’s reading. This improvement should lead to strong growth in consumer final demand since huge liquidity on consumer balance sheets can be used by those believing conditions are going to improve going forward. Next was the ISM Index which came in at 64.7, well above consensus forecasts of 61.0. This reading indicates manufacturing activity will continue to rebound for the remainder of the year. Finally, the labor market data from March was much stronger than expected. Nonfarm payrolls increased by 916,000, well above the 613,000 forecast. Job growth for January and February were revised higher.
PROBANK AUSTIN ADVISOR - APRIL 5, 2021