U.S. Consumer Confidence Jumps as Current Views Hit 18-Year High
U.S. consumer confidence improved in February, topping all forecasts and snapping a three-month losing streak.
(Bloomberg) -- U.S. consumer confidence improved in February, topping all forecasts and snapping a three-month losing streak, after the U.S. government ended the longest shutdown in the country’s history and the trade war edged toward a resolution.
The confidence index climbed to 131.4 from 121.7, the New York-based Conference Board said in a report Tuesday. That compared with a Bloomberg survey of economists that called for a rise to 124.9. The measure gauging Americans’ views on present conditions rose to an 18-year high while consumer expectations posted the largest monthly gain since 2011.
Key Insights
- The increase comes amid a solid job market and a rally in stocks that have offered consumers reasons to look past uncertainty surrounding the longest-ever government shutdown and trade war with China. The Federal Reserve’s pledge to be patient on raising interest rates may also be supporting the economic outlook.
- The gauge is in line with other sentiment indicators for February that show Americans are more upbeat. The University of Michigan’s sentiment rebounded from a two-year low and topped projections, while the Bloomberg Consumer Comfort expectations measure also snapped back, posting the biggest jump in a decade.
Official’s View
- “Consumers continue to view both business and labor market conditions favorably,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. “Expectations, which had been negatively impacted in recent months by financial market volatility and the government shutdown, recovered.”
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- The share of respondents saying business conditions will be better in six months increased to the best level since November.
- The labor differential, which measures the gap between respondents who say jobs are plentiful and those saying they’re hard to get, climbed to an 18-year high, a sign the labor market remains strong.
- Buying plans for cars, homes and major appliances all declined.
To contact the reporter on this story: Carlyann Edwards in Washington at cedwards136@bloomberg.net
To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Jeff Kearns
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