U.S. Consumer Confidence Rises to Highest Level in Three Years
The Conference Board’s index of consumer sentiment rose to 70.4 in February, its highest level in three years. The index increased from 64.8 in January, beating economists’ expectations of 65.5. Americans are seemingly becoming more optimistic about the labor market and the overall direction of the economy, signaling that consumer spending may be bolstered in the coming months, underscoring the notion that the recovery is sustainable going forward. The data surveyed within the index confirms this: the gauge measuring whether or not Americans believe that their incomes will increase in the coming months rose to 17.3 in February from 15.3 in January, while the gauge measuring the health of the labor market rose to 4.9 from 4.6 over the same periods, respectively.
The markets appeared to have priced in the gain in consumer confidence, as the Conference Board announced last week that there would be a slight change in sampling methodology. Accordingly, analysts’ forecasts ranged from 58.5 to 70.0. Nonetheless, the jump in consumer confidence falls in line with the U. of Michigan preliminary consumer sentiment reading, which rose in February as consumers became more optimistic about the recovery as the unemployment rate fell and stock prices continued to surge higher.
Written by Christopher Vecchio, DailyFX Research.
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