Skip to main content

Skies have become cloudy and hard to read with conflicting reports about consumer confidence, and continued uncertainty swirling around the war in Ukraine, potential new Covid-19 variants and rising inflation. One key measure of U.S. consumer confidence rose in March as the economy continued to expand, adding 431,000 jobs. The Conference Board reported that its Consumer Confidence Index rose to 107.2 from 105.7 in February.

“Consumer confidence was up slightly in March after declines in February and January,” Lynn Franco, senior director of economic indicators at The Conference Board, stated in a press release. “The Present Situation Index rose substantially, suggesting economic growth continued into late Q1 2022. Expectations, on the other hand, weakened further, with consumers citing rising prices, especially at the gas pump, and the war in Ukraine as factors. Meanwhile, purchasing intentions for big-ticket items like automobiles have softened somewhat over the past few months asexpectations for interest rates have risen.”


However, a separate measure of the consumer’s mood declined in March. The University of Michigan reported that its Consumer Sentiment Index fell to 59.4 from 62.8 in February, remaining at its lowest level in the past decade. Richard Curtin, chief economist of the university’s Surveys of Consumers, stated in a press release that consumers expect their personal finances to worsen by the largest proportion since the survey started in the mid-1940s. Consumers also were slightly more likely to anticipate declines rather than increases in the national unemployment rate.

“Just when difficult decisions need to be made about monetary and fiscal policies, consumers have expressed loss of confidence in government economic policies,” Curtin stated, adding that consumers were uncertain about how the war in Ukraine would affect their personal economic situations. “Combating inflation is no easy task, and success often entails slowing growth and increasing unemployment. This time, however, any resulting slowdown is likely to be met with demands for subsidies by households and firms similar to what they received during the pandemic.

“This makes the policy challenge more difficult, even if a soft landing could be achieved,” he added. “While consumer solidarity about policy choices is unrealistic, the widespread partisan divisions may stifle policy compromises and promote less-favorable outcomes for all.”

The U.S. Department of Labor reported that the unemployment rate fell to 3.6 percent in March. That is the lowest rate during the Covid-19 pandemic. The leisure and hospitality sector added 112,000 jobs, professional and business services added 102,000, retail trade added 49,000, and manufacturing added 38,000.

“Things are zooming along, but there are also a lot of headwinds that are likely to cause the labor market to plateau to a more moderate pace of growth,” Guy Berger, principal economist at LinkedIn, told The Washington Post. “We’ve had a lot of forces propping up the labor market — a super-supportive [Federal Reserve], very generous fiscal policies — but those are either played out or actually going in reverse now. In that sense, it’s going to be hard to sustain the strength we’ve been seeing.”

The government reported that average hourly earnings rose 0.4 percent, or 13 cents, in March to $31.73, and that earnings increased by 5.6 percent during the 12-month period that ended in March. The U.S. Department of Commerce reported that consumer spending rose 0.2 percent in February. Personal income rose 0.5 percent.


“Despite sagging confidence due to the war and inflation, American consumers are hanging tough, undergirded by strong employment growth and built-up savings,” Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, told Reuters.

Inflation rose in February. The Personal Consumption Expenditures Price Index, excluding the volatile food and energy components, rose 0.4 percent after climbing 0.5 percent in January. The core PCE price index rose 5.4 percent year-over-year in February, which was the biggest gain since April 1983. The PCE is the Federal Reserve’s preferred inflation gauge.

The Conference Board reported that its Leading Economic Index rose 0.3 percent in February, to 119.9, after a 0.5 percent decrease in January and a 0.8 percent increase in December. “The U.S. LEI rose slightly in February, partially reversing January’s decline,” Ataman Ozyildirim, senior director of economic research at The Conference Board, stated in a press release. “However, the latest results do not reflect the full impact of the Russian invasion of Ukraine, which could lower the trajectory for the U.S. LEI and signal slower-than-anticipated economic growth in the first half of the year. The global economic impact of the war on supply chains and soaring energy, food and metals prices — coupled with rising interest rates, existing labor shortages and high inflation — all pose headwinds to U.S. economic growth.

“While the Omicron wave and its economic impact waned in recent months, the potential for new Covid-19 variants remains,” Ozyildirim added. “Amid these risks, The Conference Board revised its growth projection for the U.S. economy down to 3 percent year-over-year GDP growth in 2022 — still well above the prepandemic growth rate, which averaged around 2 percent.”

The mood at the nation’s small businesses darkened in February. The National Federation of Independent Business reportd that its Small Business Optimism Index fell 1.4 points, to 95.7. Twenty-six percent of member business owners said inflation was their single most important problem. That was the highest percentage since the third quarter of 1981.

“Inflation continues to be a problem on Main Street, leading more owners to raise selling prices again in February,” NFIB chief economist Bill Dunkelberg stated in a press release. “Supply-chain disruptions and labor shortages also remain problems, leading to lower earnings and sales for many.”

Forty-eight percent of member owners reported job openings that they could not fill. A net 45 percent of member owners reported raising pay during the month. That figure was down 5 points from January’s reading, which was a 48-year record high.

Confidence among the nation’s home builders diminished in March. The National Association of Home Builders reported that its NAHB/Wells Fargo Housing Market Index fell 2 points, to 79, from a downwardly revised reading in February. Builder sentiment has now declined for three months in a row.

“While builders continue to report solid buyer traffic numbers, helped by historically low existing-home inventory and a persistent housing deficit, increasing development and construction costs have taken a toll on builder confidence,” NAHB chairman Jerry Konter stated in a press release. “We call upon policy-makers to act now to ease supply-chain woes. Improving access to lumber, oriented strand board and other materials will help builders increase the supply of badly needed housing and fight inflation.”

Added NAHB chief economist Robert Dietz: “The March HMI recorded the lowest future sales expectations in the survey since June 2020. Builders are reporting growing concerns that increasing construction costs — up 20 percent over the last 12 months — and expected higher interest rates connected to tightening monetary policy will price prospective home buyers out of the market. While low existing inventory and favorable demographics are supporting demand, the impact of elevated inflation and expected higher interest rates suggests caution for the second half of 2022.”

The HMI index that gauges current sales conditions fell 3 points, to 86; the gauge that measures sales expectations in the next six months dropped 10 points, to 70; and the component that charts the traffic of prospective buyers rose 2 points, to 67. Any number above 50 indicates that more builders view conditions as good rather than poor.

The Commerce Department reported that sales of new homes fell 2 percent in February, to a seasonally adjusted annual rate of 772,000. The average sale price for a new home sold in February was $511,000.

Existing-home sales also fell in February. The National Association of Realtors reported that sales dropped 7.2 percent, to a seasonally adjusted annual rate of 6.02 million. “Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases,” Lawrence Yun, the NAR’s chief economist, stated in a press release. “Some who had previously qualified at a 3 percent mortgage rate are no longer able to buy at the 4 percent rate.

“Monthly payments have risen by 28 percent from one year ago, which, interestingly, is not a part of the Consumer Price Index, and the market remains swift with multiple offers still being recorded on most properties,” Yun added.

The median existing-home price was $357,300 in February, marking 120 consecutive months of year-over-year increases. That is the longest-running streak on record. 

This article was originally published in the May 2022 issue.



Open for Business

Despite drought conditions in the western United States, boating remains popular on Lake Mead and elsewhere.


Crude Weakens and Gas Prices Ease

West Texas Intermediate crude oil fell below $100 per barrel yesterday, while gasoline and diesel prices have slipped from their June highs.


RFA Hires Executive Director

Robert Nixon brings fishing-policy expertise and lobbying experience to the group’s efforts to preserve anglers’ rights.


2022 Women in the Industry Summit, Leadership Panel, Awards Ceremony & Reception



Seabins Coming to Lake Erie

The devices, deployed as part of a pilot program, skim and collect debris from the water, including microplastics. Meanwhile, MBIA announces scholarship funds.


Boatsetter Reports Uptick in Rentals

The on-water experience company has seen triple-digit growth in pontoon and party-boat rentals, as well as fishing and yacht charters.


Smartgyro Signs Distributors, Hires Sales Manager

The company said the three U.S. distributors, working with Bob Walker, will help expand its dealer network and brand recognition.


The Upside of a Downturn

Economic challenges should push you to develop a strategy that helps you weather the storm and come out stronger on the other side.