The Conference Board’s Consumer Confidence Index shot up for the fifth consecutive month, reaching its highest level since February 2008, as Americans continued to feel better about the U.S. economy.
The index rose to 70.4, up from 64.8 last month, led by an increase in the Expectations Index to 95.1 from 87.3. The Present Situation segment improved to 33.4 from 31.1.
Although increasing, the overall index reading is still far lower than the 90 range that many consider an indicator of a stable economy.
Lynn Franco, director of the Conference Board Consumer Research Center, said, “The Consumer Confidence Index is now at a three-year high, due to growing optimism about the short-term future. Consumers’ assessment of current business and labor market conditions has improved moderately, but still remains rather weak. Looking ahead, consumers are more positive about the economy and their income prospects, but feel somewhat mixed about employment conditions.”
The percentage of respondents expecting more jobs in the months ahead fell to 19.8 percent from 20.8 percent in January, but that trend was offset by a sharp decline in those anticipating fewer jobs, down to 15.4 percent from 21.2 percent. The proportion of consumers expecting an increase in their incomes rose to 17.3 percent from 15.3 percent, according to the survey results.
According to economist Maury Harris at UBS, “A mixed job outlook with higher wages hints at a two-tier labor market, one for the currently employed and one for the unemployed.”
Chris Christopher, senior economist at IHS Global Insight, said, “We expect consumer confidence and spending to keep improving in 2011 due to a rising stock market, an improving job market, and increased household income. However, rising gasoline and food prices, turmoil in the Middle East, and a poor housing market are putting a damper on things and keeping consumer confidence at relatively depressed levels.”