Consumer Confidence improves
The Conference Board Consumer Confidence Index improved again in February, after increasing in January. The Index now stands at 91.3 (1985=100), up from 88.9 in January. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—climbed from 85.5 to 92.0. However, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell marginally, from 91.2 last month to 90.8 in February.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was February 11. The survey results did not fully capture the events surrounding the Texas power crisis nor the loosening of dining restrictions in NYC.
“After three months of consecutive declines in the Present Situation Index, consumers’ assessment of current conditions improved in February,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “This course reversal suggests economic growth has not slowed further. While the Expectations Index fell marginally in February, consumers remain cautiously optimistic, on the whole, about the outlook for the coming months. Notably, vacation intentions—particularly, plans to travel outside the U.S. and via air—saw an uptick this month, and are poised to improve further as vaccination efforts expand.”
Consumers’ assessment of current conditions improved in February. The percentage of consumers claiming business conditions are “good” increased from 15.8 percent to 16.5 percent, while the proportion claiming business conditions are “bad” fell from 42.4 percent to 39.9 percent. Consumers’ assessment of the labor market also improved. The percentage of consumers saying jobs are “plentiful” increased from 20.0 percent to 21.9 percent, while those claiming jobs are “hard to get” declined from 22.5 percent to 21.2 percent.
Consumers, however, were marginally less optimistic about the short-term outlook in February. The percentage of consumers expecting business conditions will improve over the next six months fell from 34.1 percent to 31.0 percent; however, the proportion expecting business conditions will worsen also declined, from 19.0 percent to 17.7 percent. Likewise, consumers’ outlook regarding the job market was somewhat mixed. The proportion expecting more jobs in the months ahead decreased from 30.4 percent to 26.1 percent; however, those anticipating fewer jobs also declined, from 22.1 percent to 20.6 percent. Regarding short-term income prospects, 15.2 percent of consumers expect their incomes to increase in the next six months, down slightly from 15.8 percent in January. Conversely, 13.2 percent expect their incomes to decrease, down from 15.5 percent last month.