Consumer sentiment continued to improve in February, building on a January upswing. The Conference Board’s Consumer Confidence Index reached 91.3 in February, up from 88.9 in January. Its Present Situation Index, based on consumers’ assessment of current business and labor market conditions, also climbed, from 85.5 to 92. However, the Conference Board’s Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—fell marginally, from 91.2 in January to 90.8 last month.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a 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 New York City.
“After three months of consecutive declines in the Present Situation Index, consumers’ assessment of current conditions improved in February,” says 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, with the percentage claiming business conditions are “good” increasing from 15.8 percent to 16.5 percent, while the share saying that they are “bad” fell from 42.4 percent to 39.9 percent. Consumers’ appraisal of the labor market also improved. The percentage of consumers saying jobs are “plentiful” increased from 20 percent to 21.9 percent, while those claiming jobs are “hard to get” declined from 22.5 percent to 21.2 percent.
The Conference Board reports that consumers were marginally less optimistic about the short-term outlook in February. The percentage of consumers expecting business conditions to improve over the next six months fell from 34.1 percent to 31 percent; however, the proportion expecting business conditions to worsen also declined, from 19 percent to 17.7 percent. Consumers’ outlook regarding the job market was also somewhat mixed. The percentage expecting more jobs in the months ahead decreased from 30.4 percent to 26.1 percent; while 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 income to increase in the next six months, down slightly from 15.8 percent in January. Conversely, 13.2 percent expect their income to decrease, down from 15.5 percent last month.
Used with permission from PPAI