Consumer Confidence Hits Three-Month High
Consumer confidence hit a three-month high in February as cases of COVID-19 continue to drop and vaccine distribution expands, according to a Tuesday (Feb. 23) report from The Conference Board.
The Conference Board Consumer Confidence Index went up to 91.3 from a revised 88.9 level in January. The monthly survey measures how people feel about current and future economic conditions.
The Present Situation Index, which went up to 92.0 from January’s 85.5, measures how people feel about the economy right now.
The Expectations Index declined a bit, dropping to 90.8, from last month’s 91.2. The index gauges how people feel about income, business, and labor market conditions in the short term.
“After three months of consecutive declines in the Present Situation Index, consumers’ assessment of current conditions improved in February,” said Lynn Franco, senior director of economic indicators at The Conference Board.
“This course reversal suggests economic growth has not slowed further. While the Expectations Index fell marginally in February, consumers remain cautiously optimistic, on the whole, about the outlook for the coming months. Notably, vacation intentions — particularly, plans to travel outside the U.S. and via air — saw an uptick this month, and are poised to improve further as vaccination efforts expand,” Franco said.
The percentage of consumers feeling good about the current business climate went up to 16.5 percent from 15.8 percent. The number of respondents who perceived the current business climate as bad dropped to 39.9 percent from 42.4 percent.
People are also feeling better about the job markets. The number of respondents feeling positive about the labor market went up to 21.9 percent from 20.0 percent last month. The number of people who said jobs were hard to find dropped to 21.1 percent from 22.5 percent.
Respondents also expect inflation to expand to 6.3 percent, the highest since June. Conversely, 13.2 percent expect their incomes to decrease, down from 15.5 percent last month.
December’s Federal Reserve survey indicated that people anticipated spending more money even as they anticipated their income to shrink.