February was a month of mixed results for consumer confidence as the Consumer Sentiment Index increased while the Consumer Confidence Index decreased slightly. After a slide in late 2013, both measures have shown resilience in the face of extreme weather and high utility bills.
According to Thomson Reuters and the University of Michigan, the Consumer Sentiment Index increased in February by 0.4 points from the prior month. Meanwhile after increasing in January, the Conference Board reported that the Consumer Confidence Index fell by 1.3 points on a month-over-month seasonally adjusted basis in to 78.1.
The month-over-month decline in the Consumer Confidence Index was attributed to concern over the short-term economic outlook. In spite of this concern, the Present Situation Index is at its highest level since April 2008. The Present Situation Index is a sub-index of the survey in which participants are asked about current economic conditions.
According to the Conference Board, the share of consumers planning to buy a home in the next 6 months was 5.9% on a seasonally adjusted 3-month moving average basis. Over this same period, the share of respondents planning to purchase a “lived-in” home increased slightly to 3.4%. The share of respondents planning to purchase a new home was 1.0%.
The mixed result in measures of consumer confidence does not provide clarity to the broader economic outlook. Instead, questions remain on strength of the labor market and lagging income growth for younger age groups.