In this photo made March 26, 2010, Tracy Smiley shops with her children Jacob Crowder, 9, left, and Camryn Crowder, 6, at a Wal-Mart store near her home in Lacey, Wash. Smiley feels better about her personal finances and the overall economy and has started to cautiously trade back up for certain items in her shopping. (AP Photo/Elaine Thompson) - AP

Consumers on the mend

Signs of life in consumer spending are sprouting this spring.

A partial rebound in consumer confidence, a positive report on January home prices and an expected strong March from retailers suggest Americans are cautiously perking up.

The Conference Board said Tuesday its Consumer Confidence Index rose to 52.5 in March, recovering about half of the nearly 11 points it lost in February. Analysts expected a reading of 50 for March, but the index is still far below the 90 reading that's considered healthy.

"We're a lot better off, but we have a lot more improvement to go," said Michael P. Niemira, chief economist at the International Council of Shopping Centers. He said shoppers have "more willingness to spend" and are starting to trade back up in areas where they had cut back.

Separately, the Standard & Poor's/Case-Shiller 20-city home price index showed prices rose 0.3 percent from December to January, the eighth-consecutive monthly gain. Among the 20 cities in the index, 12 rose. But there's some worry the momentum in the housing market won't be sustained. Home sales sank during the winter, and government incentives that have propped up the market are ending.

Meanwhile, merchants are expected to report a 3.5 percent gain for March when they release sales figures next week, according to Niemira's estimate, which was upgraded from his original 2.5 percent projection. The figure is based on sales at stores open at least a year.

Retailers reported a 3.7 percent increase for February, marking the biggest increase since November 2007, a month before the recession began.

Still, as consumers cautiously return to some more expensive brands and stores, they're still buying differently than before the recession, keeping some frugal habits while shedding the more extreme cutbacks.

Share This Story