U.S. consumer confidence rose in March to a one-year high as Americans grew more upbeat about the economy and labor market, a sign that household spending may pick up more broadly in the coming months.

The Conference Board’s index increased to 109.7 from a revised 90.4 reading in February, according to a report Tuesday. That was the sharpest one-month gain in nearly 18 years and exceeded the most optimistic forecast in a Bloomberg survey of economists.

Households’ outlooks brightened as millions received COVID-19 vaccinations and restrictions on businesses were lifted more broadly. A fresh round of fiscal stimulus also likely helped boost sentiment and is projected to bolster economic activity and the job market in coming months.

Consumer optimism rose on improved labor, business outlooks

The group’s gauge of expectations rose to 109.6, the highest since July 2019, while a measure of sentiment about current conditions rose to a one-year high of 110. The 18.7-point gain from February in the measure of outlook was the largest since May 2009.

“Consumers’ assessment of current conditions and their short-term outlook improved significantly, an indication that economic growth is likely to strengthen further in the coming months,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. “Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items.”

A record share of respondents said they plan to purchase a home in the coming months. A measure of consumers’ plans to buy cars and major appliances also rose. A separate report Tuesday showed U.S. home prices surged to the highest since February 2006.

Consumers are more upbeat about the labor market as a greater share of respondents said jobs were “currently plentiful,” and the fewest in a year said positions were hard to get. They were also more upbeat about prospects for employment, with 36.1 per cent expecting greater job availability in the next six months.

The government’s March jobs report on Friday is forecast to show the biggest increase in payrolls since October.