Consumer Confidence Back Up at Levels Not Seen Since 2000
The Conference Board has released its reading on consumer confidence for February. The 130.8 figure was up 6.5 points 124.3 in January. Consensus estimates had been 127.0 from Dow Jones (Wall Street Journal) and 126.4 from Bloomberg.
What stands out about this report is that the cutoff date for the preliminary results was February 15. That means the people surveyed had already seen the panic selling in the stock market.
Note also that the confidence index was shown to be at the highest level since 2000. That was right around the peak of the last tech boom that turned into the dot-com bubble.
Each consumer confidence report has two major components, both of which posted strong gains from January to February. The Present Situation Index increased from 154.7 to 162.4, and the Expectations Index increased from 104.0 to 109.7.
Consumer appraisal of present-day conditions improved in February, and consumers were more optimistic about the short-term outlook. The assessment of the labor market considerably more favorable in February as well. Individually, these were shown as follows:
- The percentage saying business conditions are “good” increased slightly from 35.0 percent to 35.8 percent.
- Those saying business conditions are “bad” decreased from 13.0 percent to 10.8 percent.
- Those claiming jobs are “plentiful” increased from 37.2 percent to 39.4 percent.
- Those claiming jobs are “hard to get” decreased from 16.3 percent to 14.7 percent.
- The percentage of consumers anticipating business conditions will improve over the next six months increased from 21.5 percent to 25.8 percent.
- The percentage of consumers anticipating business conditions will worsen decreased from 9.8 percent to 9.4 percent.
- The proportion expecting more jobs in the months ahead increased from 18.7 percent to 21.6 percent.
- Those anticipating fewer jobs declined from 12.5 percent to 11.9 percent.
- The percentage of consumers expecting an improvement in their income increased from 20.6 percent to 23.8 percent.
- The percentage of consumers expecting a decrease in income also rose, from 7.9 percent to 8.6 percent.
Lynn Franco, Director of Economic Indicators at The Conference Board, said of February’s strong report:
Consumer confidence improved to its highest level since 2000 (Nov. 2000, 132.6) after a modest increase in January. Consumers’ assessment of current conditions was more favorable this month, with the labor force 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.