Consumer Confidence rebounded in February as the shock effect caused by the fiscal cliff uncertainty and payroll tax cuts appears to have abated, reports Lynn Franco, director of economic indicators at The Conference Board.
"Consumers’ assessment of current business and labor market conditions is more positive than last month. Looking ahead, consumers are cautiously optimistic about the outlook for business and labor market conditions. Income expectations, which had turned rather negative last month, have improved modestly," Franco said.
Consumers’ assessment of present day conditions improved in February, the Conference Board says. "Those claiming business conditions are 'good' rose to 18.1 percent from 16.1 percent, while those stating business conditions are 'bad' decreased to 27.8 percent from 28.4 percent. Consumers’ appraisal of the labor market was mixed. Those saying jobs are 'plentiful' increased to 10.5 percent from 8.5 percent, while those claiming jobs are 'hard to get' edged up to 37.0 percent from 36.6 percent."
The Conference Board Consumer Confidence Index, which had declined in January, rebounded in February. The Index now stands at 69.6 (1985=100), up from 58.4 in January. The Present Situation Index increased to 63.3 from 56.2. The Expectations Index improved to 73.8 from 59.9 last month.
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 14.
Consumers were more optimistic about the short-term outlook this month, the Conference Board said. Those expecting business conditions to improve over the next six months increased to 18.9 percent from 15.6 percent, while those expecting business conditions to worsen declined to 16.5 percent from 20.4 percent.
Consumers’ outlook for the labor market was more positive. Those anticipating more jobs in the months ahead improved to 16.7 percent from 14.4 percent, while those expecting fewer jobs decreased to 21.5 percent from 26.7 percent. The proportion of consumers expecting their incomes to increase rose to 15.7 percent from 13.5 percent, while those anticipating a decrease fell to 19.6 percent from 23.3 percent.