Consumer confidence unexpectedly increased in February to the highest level since July 2001 as Americans grew more upbeat about present and future conditions, according to a report on February 28 from the Conference Board.
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. While the measure of consumer expectations for the next six months rose to 102.4 from 99.3.
There was also an increase in the share of those who said more jobs will be available in the coming months rose to 20.4% from 19.7%.
The gain in sentiment is the third in the last four 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.
“Consumers rated current business and labor market conditions more favorably this month than in January,” said Lynn Franco, director of economic indicators at the Conference Board. “Overall, consumers expect the economy to continue expanding in the months ahead.”
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.
Twenty four percent of consumers said they expect better business conditions in the next six months, up from 22.9%.
By Austin Weinstein