United States: Consumer confidence sharply rebounds in February as shutdown effects abate
February 26, 2019
The Conference Board’s monthly consumer confidence index rose from a revised 121.7 in January (previously reported: 120.2) to 131.4 in February, markedly overshooting market expectations of 125.0. Thus, the index climbed higher above the 100-point threshold that separates consumer optimism from pessimism.
The rebound in optimism observed in February came primarily on the back of recovering expectations, with the corresponding index gaining a whopping 14 points over January and returning to optimistic territory. Consumer expectations were deeply affected by financial market volatility and the government shutdown in recent months, and so February’s print marked a return to normality for survey respondents. Meanwhile, the present situation index also gained ground, albeit more modestly.
Regarding the current economic situation, respondents in February were more likely to state that business conditions were good, while the labor differential—the difference between the percentage of respondents who state that jobs are plentiful and those who say that jobs are hard to get—improved marginally from 34.1 in January to 34.3 in February. Meanwhile, all indicators of forward-looking consumer sentiment improved in the month, with respondents indicating improving sentiment regarding their personal income prospects, the labor market outlook, as well as the general business environment.
United States Private Consumption Forecast
FocusEconomics Consensus Forecast panelists expect private consumption to grow 2.5% in 2019, down 0.1 percentage points from last month’s forecast. For 2020, the panel sees private consumption growth moderating to 2.0%.
Author: Joffrey Simonet, Economist