US Consumer Confidence Rises to Highest Since July 2001
Consumer confidence rose in February to the highest level since July 2001, according to a report Tuesday from the New York-based Conference Board. The group’s gauge rose to 114.8, from 111.6 in January.
The median forecast in a media survey of economists called for a fall to 111.
Key Points: Confidence index advanced to 114.8 (forecast was 111) from a revised 111.6 in January Present conditions gauge increased to 133.4, the highest since July 2007, from 130 Measure of consumer expectations for the next 6 months rose to 102.4 from 99.3 Share of those who said more jobs will be available in the coming months rose to 20.4% from 19.7%
Big Picture: The gain in sentiment is the 3rd in the last 4 months, though the real test for the economy is how much follow-through there will be in terms of actual spending. While companies continue to add workers, the pace of wage growth has been relatively subdued, especially at this point of the business cycle. Americans are also waiting on specifics from Washington as lawmakers consider ways to boost the economy.
Economist’s Takeaway: “Consumers rated current business and labor market conditions more favorably this month than in January,” the director of economic indicators at the Conference Board, said in a statement. “Overall, consumers expect the economy to continue expanding in the months ahead.”
The Details: Buying plans were mixed, with more expecting to buy a new automobile and fewer planning purchases of appliances Share of households who expect their incomes to rise in next six months was little changed at 18.3% this month after 18.1%. The labor differential, measuring the share of those saying jobs are plentiful minus the share saying they’re hard to get, was little changed at 5.9 points after 6 points in January 24% of consumers said they expect better business conditions in the next six months, up from 22.9%.
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