Consumer Confidence Rises in February

The Conference Board's Consumer Confidence Index is an indicator intended to measure consumer confidence in the United States, which is classified as the level of optimism for the general economic condition of the United States. This Index is expressed through consumer's activities of savings and spending. The Consumer Confidence Index rose to 70.8 in February, higher than the general analysts' estimate of 63.0. This is essentially bullish for the outlook of the US economy, as the consumer makes up two-thirds of GDP. US equity markets spiked higher on heavy volume, after the release. According to the Conference Board's report, The Conference Board Consumer Confidence Index, which had decreased in January, increased in February. The Index now stands at 70.8 up from 61.5 in January. The Present Situation Index increased to 45.0 from 38.8. The Expectations Index rose to 88.0 from 76.7 in January. Lynn Franco, Director of The Conference Board Consumer Research Center, said, “Consumer Confidence, which had declined last month, posted a sizeable improvement in February. The Index is now close to levels last seen a year ago (Feb. 2011, 72.0.). Consumers are considerably less pessimistic about current business and labor market conditions than they were in January. And, despite further increases in gas prices, they are more optimistic about the short-term outlook for the economy, job prospects, and their financial situation. ” Consumers' assessment of current conditions was more favorable in February. Those claiming business conditions are “good” increased slightly to 13.3 percent from 13.2 percent, while those claiming business conditions are “bad” decreased to 31.2 percent from 38.3 percent. Consumers' appraisal of the labor market was also less pessimistic. Those stating jobs are “plentiful” increased to 6.6 percent from 6.2 percent, while those saying jobs are “hard to get” decreased to 38.7 percent from 43.3 percent.