Healthier consumers are happier consumers are spending consumers.
US consumer confidence has rebounded to its highest level since the onset of the pandemic in America in March last year. This is hardly surprising with cases of coronavirus infections dropping, vaccine distribution running on full steam, a strengthening labour market, generous government handouts and pledges of continued low borrowing costs.
The Conference Board's consumer confidence index jumped by 19.3 points - the biggest monthly increase since April 2003 - to a reading of 109.7 in March. "The Present Situation Index—based on consumers' assessment of current business and labor market conditions—climbed from 89.6 to 110.0. The Expectations Index—based on consumers' short-term outlook for income, business, and labor market conditions—also improved, from 90.9 last month to 109.6 in March" (Conference Board).
Consumers' assessment of current and future labour market conditions also improved.
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According to Lynn Franco, Senior Director of Economic Indicators at The Conference Board, "Consumers' renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items".
And why the heck not? US consumers' fear of catching the bug is diminishing as cases of covid-19 infections drop and vaccines roll.
Worlometer.info data shows the seven-day moving average of daily cases of infections in the US falling to 64.6K as of the 29th of March from a peak of 255.6K in January this year.
Also, the Centers for Disease Control and Prevention (CDC) reports that as of 30 March, around 96 million adult Americans have received the first shot of the vaccines, with more than 53 million already fully vaccinated. Vox.com opines that, "At current rates, America is administering nearly 2.8 million Covid-19 vaccine doses a day — roughly enough to vaccinate every adult (18 and older) in the country by July 4" - just in time for Independence Day.
While the US unemployment rate -- at 6.2% in February - remained well-above pre-pandemic levels - 3.5% in February 2020 and 4.4% in March 2020 - the Conference Board's survey shows increased optimism over the jobs outlook. "The proportion expecting more jobs in the months ahead increased from 27.4 percent to 36.1 percent, while those anticipating fewer jobs declined from 21.3 percent to 13.4 percent."
You'll be happy too Virginia, when added to these is US President's US$1.9 trillion "American rescue Plan" that hands out a one-off payment of US$1,400 to most citizens and extends unemployment support, among others.
This is expected to be topped up with another US$4 trillion in new infrastructure spending.
As the saying goes, "something worth doing is worth overdoing".
Jogging Joe is certainly pulling all the stops. But while this is sending the American economy to a roaring 2020's, it's also sparking concern over inflation and soaring US debt - according to the Congressional Budget Office (CBO), America's public debt soared from US$9 trillion to US$21 trillion between 2010 and 2020.
So much so that benchmark 10-year US Treasury bond yields have risen to a 14-month high of 1.78%.
This suggests that Uncle Sam would be paying higher interest payments on its increased debt and it could also force the Fed to raise interest rates sooner than promised to prevent runaway inflation.
Read our full COVID-19 news coverage and analysis here.