U.S. consumer confidence jumped sharply in March, although the increase was more a case of going from “catastrophic-to-dismal,” says a report.

BMO Nesbitt Burns Inc. said U.S. consumer confidence soared from 61.4 in March to 81.0 in April, setting the stage for better economic activity this spring. “Rising confidence can be a self-fulfilling prophesy,” said BMO chief economist Sherry Cooper. “In context, this big jump can be characterized as catastrophic-to-dismal. Confidence will rise much further if a healthy expansion emerges in coming months.”

In a jump this size, all the components have to be on board. The “present situation” component was up about 14 points to 75.3. The critical “expectations” index surged more than 23 points to 84.8. This replays the pattern after the first Gulf War, Cooper said.

Even the hard-pressed labour markets received good news with a visible drop in “jobs hard to get” and a welcome increase in “jobs readily available.”

“The Fed won’t be surprised by the direction of the report, but they will clearly welcome the exceptional size,” Cooper said. “Chairman Greenspan will use this as ammunition for staying on hold in his testimony on Wednesday. The seeds of faster growth are being planted as we head into the spring months.”

http://www.bmonb.com/economics/econofacts/20030429b/