February saw broad growth in consumers’ confidence. After mixed signals in January, both indicators of consumer confidence rose in the second month of the new year. Thomson Reuters and the University of Michigan reported that its final estimate of consumer confidence, Consumer Sentiment, rose by 5.1% on a seasonally adjusted monthly basis in February to 77.6. The final reading was revised up 3.8 points from its February estimate that was released earlier in the month. Meanwhile, the Conference Board reported that its measure of consumer confidence rose by 19.2% to 69.6. The increase in the Conference Board’s measure of consumer confidence reflects consumers’ growing confidence in both their present situation and in their expectations for the future. In February, the Consumer Confidence – Present Situation Index grew by 12.7% on a seasonally adjusted monthly basis while the Consumer Confidence – Expectations Index rose by 23.1%.
Improvements in consumers’ confidence were widespread. As Chart 2 illustrates, for comparable categories of business conditions and employment, consumer confidence rose in both their present situation and in their expectations for the future. In most categories an increase in the share of respondents citing an improvement coincided with a decline in the percentage of respondents citing worsening conditions. However, the increase in respondents citing an improvement in expectations reflected a decline in the portion of respondents expecting worsening conditions in the future. Conversely, the improvement in the percentage of respondents citing improved present conditions largely reflected a decrease in the share of respondents citing present conditions to be about the same.
According to the illustration below, the portion of consumers citing “good” business conditions in the present and “better” business conditions in the future climbed by 2.0 and 3.3 percentage points respectively. At the same time, the share of consumers citing “plentiful jobs” in the present and an expectation for “more jobs” in the future rose by 2.0 and 2.3 percentage points respectively. Meanwhile, the share of consumers citing “bad” business conditions in the present and an expectation for “worse” business conditions in the future fell by 0.6 and 3.9 percentage points respectively. Expectations for “fewer jobs” in the future declined by 5.2 percentage points, but the share of respondents citing “fewer jobs” in the present rose. However, its increase was more than offset by the increase in the share of consumers citing “plentiful jobs” in the present.
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