Consumer Confidence Increases
According to the most recent Conference Board report, February saw an increase in consumer confidence nationwide. The Conference Board’s Consumer Confidence Index® (CCI) rebounded in February by 11.2 points after experiencing a decline in January. The CCI for February increased to 69.6 up from 58.4 in January a 19.2% increase.
Related to the CCI is The Present Situation Index (PSI), which reflects prevailing business conditions, and The Expectations Index (EI) anticipates likely developments for the months ahead. In February the PSI increased to 63.3 from 56.2 in January, and in the same period the EI improved to 73.8 from 59.9.
Director of Economic Indicators at The Conference Board, Lynn Franco, says, “Consumer Confidence rebounded in February as the shock effect caused by the fiscal cliff uncertainty and payroll tax cuts appears to have abated.”
Relative to current conditions, attitudes of U.S. consumers improved in February with those consumers believing that business conditions are “good” rising to 18.1 percent from 16.1 percent the previous month. Consumers stating that business conditions are “bad” decreased slightly to 27.8 percent in February from 28.4 percent in January.
In considering the labor market consumers that believe jobs are “plentiful” rose to 10.5 percent in February, up from 8.5 percent the previous month. At the same time 37.0 percent of consumers say jobs are “hard to get,” a slight increase from 36.6 percent in January.
Looking to the near future for business conditions 18.9 percent of consumers in February expect improvements in the next six months; this up from 15.6 percent in January. Those expecting business conditions to worsen declined to 16.5 percent from 20.4 percent.
As to the labor outlook over the next six months, consumers anticipating more jobs improved to 16.7 percent from 14.4 percent, while those anticipating fewer jobs decreased to 21.5 percent from 26.7 percent.
Any improvement in the CCI can always be looked upon as a positive indicator for the escrow, mortgage and real estate industries; however, though market conditions are improving, there is still a ways to go for full consumer confidence. Compare this February’s 69.6 CCI with February 2007 when it was 111.2.