Positive Outlooks On Business, Labor Markets Raise Consumer Confidence In February
While consumer confidence eased in January, The Conference Board’s data shows it rebounded in February. The Conference Board’s Consumer Confidence Index now stands at 131.4, up from 121.7 in January.
“Consumer Confidence rebounded in February, following three months of consecutive declines,” says Lynn Franco, senior director of economic indicators at The Conference Board. “The Present Situation Index improved, as consumers continue to view both business and labor market conditions favorably. Expectations, which had been negatively impacted in recent months by financial market volatility and the government shutdown, recovered in February. Looking ahead, consumers expect the economy to continue expanding. However, according to The Conference Board’s economic forecasts, the pace of expansion is expected to moderate in 2019.”
Looking closer at The Conference Board’s findings, the Present Situation Index—based on consumers’ assessment of current business and labor market conditions—improved, from 170.2 to 173.5. The Expectations Index—consolidating consumers’ short-term outlook for income, business and labor market conditions—increased from 89.4 last month to 103.4 this month.
Consumers’ outlook on current conditions also improved somewhat from January, with those describing business conditions as “good” increasing from 36.4 percent to 41.2 percent, while those saying they are “bad” remaining unchanged month-on-month at 10.8 percent. Consumers’ appraisal of the labor market was more mixed, however, with those saying jobs are “plentiful” decreasing slightly from 46.7 percent to 46.1 percent and those claiming jobs are “hard to get” also decreasing, from 12.6 percent to 11.8 percent.
Along with the index, consumers’ optimism about the short-term future recovered this month. The percentage expecting business conditions to improve over the next six months increased from 16.3 percent to 19.7 percent, while those expecting them to worsen decreased from 13.8 percent to 8.9 percent. Their outlook for the labor market was also more favorable. The share of consumers expecting more jobs in the months ahead increased from 15.3 percent to 18.5 percent, while those anticipating fewer jobs declined, from 16.2 percent to 12.2 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement rose from 17.7 percent to 20 percent, but the proportion expecting a decrease also increased, from 6.8 percent to 8.5 percent.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was February 15.