U.S. consumer confidence rose unexpectedly in March but remains below last year's average, according to survey data released Tuesday.
The climb adds to pressure on the Federal Reserve as it looks to control rising prices.
The closely watched consumer confidence index increased in March to 104.2 from 103.4 last month, The Conference Board said in a statement. The release was higher than the median expectation of analysts in a Briefing.com survey.
"The gain reflects an improved outlook for consumers under 55 years of age and for households earning $50,000 and over," said Ataman Ozyildirim, senior director for economics at The Conference Board.
But he warned that, "while consumers feel a bit more confident about what's ahead, they are slightly less optimistic about the current landscape."
Consumers intend to spend less on highly discretionary categories such as visiting amusement parks and dining, he said.
But he added that they expect to spend more on necessary items like health care and home maintenance.
The U.S. Federal Reserve has been sharply raising interest rates since last year in a bid to tackle rising prices, which remain well above its long-run target of two percent.
Earlier this month, the Fed raised its benchmark lending rate by 25 basis points and signaled it is expecting just one more rate hike this year.
An uptick in economic conditions would make it more challenging for the Fed to bring price rises under control.
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