The barometer for current economic conditions jumped to 114.5 from 111.5 in February, reaching the highest level since November of 2000, largely due to improved in personal finances.
The gauge of future expectations increased to 86.7 from 86.5.
Americans expect the inflation rate to be 2.4 percent next year, below 2.8 percent in February and 2.2 percent over the next 5 years, lower than 2.5 percent the previous month.
Among Republicans, the expectations index was at 122.4, while it was 55.3 for Democrats, showing the divide in the outlook since Donald Trump’s election victory. Eighty-seven percent of Republicans expect continued gains in the economy over the next five years, compared with 22 percent of Democrats.
"The overall level of consumer sentiment remained quite favourable in early March due to renewed strength in current economic conditions as well as the extraordinary influence of partisanship on economic prospects", Surveys of Consumers chief economist Richard Curtin said. "Overall, the sentiment data has been characterised by rising optimism as well as by rising uncertainty due to the partisan divide. Optimism promotes discretionary spending, and uncertainty makes consumers more cautious spenders. This combination will result in uneven spending gains over time and across products."