Consumer Confidence Reaches Highest Level In 18 Years
Consumer confidence ticked up in February, reaching its highest level since November 2000. The Conference Board reports that its Consumer Confidence Index stood at 130.8 in February, up from 124.3 in January.
"Consumer confidence improved to its highest level since 2000 after a modest increase in January," says Lynn Franco, director of economic indicators at The Conference Board. "Consumers' assessment of current conditions was more favorable this month, with the labor force as the main driver. Despite the recent stock market volatility, consumers expressed greater optimism about short-term prospects for business and labor market conditions, as well as their financial prospects. Overall, consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead."
A closer look at The Conference Board’s findings shows that in February, the Present Situation Index increased from 154.7 to 162.4, while the Expectations Index improved from 104.0 last month to 109.7.
Consumers' assessment of present business conditions grew more positive in February. The percentage describing business conditions as "good" increased from 35 percent in January to 35.8 percent, while those saying they were "bad" decreased from 13 percent to 10.8 percent. Similarly, consumers' perspective on the labor market was considerably more favorable in February. Those saying jobs are plentiful increased from 37.2 percent to 39.4 percent, while those claiming they are hard to get decreased from 16.3 percent to 14.7 percent.
Consumer optimism about business conditions’ short-term outlook also improved in February. The percentage anticipating an improvement in business conditions over the next six months increased from 21.5 percent to 25.8 percent, while those expecting business conditions to worsen slipped from 9.8 percent to 9.4 percent.
The job market is another area where consumers’ outlook improved in February. The share of those surveyed expecting more jobs in the months ahead increased from 18.7 percent to 21.6 percent, while those anticipating fewer jobs declined from 12.5 percent to 11.9 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement increased from 20.6 percent to 23.8 percent. However, the percentage expecting a decrease also rose, from 7.9 percent to 8.6 percent.