The Conference Board's Consumer Confidence Index rebounded in February after a drop in January.
Lynn Franco, director of economic indicators at The Conference Board, said in a statement today that “the shock effect caused by the fiscal cliff uncertainty and payroll tax cuts appears to have abated. Consumers’ assessment of current business and labor market conditions is more positive than last month.
“Looking ahead, consumers are cautiously optimistic about the outlook for business and labor market conditions. Income expectations, which had turned rather negative last month, have improved modestly.”
Bloomberg said consumer confidence jumped more than was predicted. The index climbed to 69.6, exceeding all forecasts in a Bloomberg survey of economists, from a revised 58.4 in January, according to data from The Conference Board. It was the first improvement in four months and the biggest since November 2011.
The gain in sentiment from the lowest level in more than a year signals that Americans are beginning to cope with the 2-percentage-point increase in the payroll tax used to fund Social Security and higher gasoline prices that are curbing disposable income. Rising home values and gains in employment may be brightening attitudes, helping to underpin spending.
“The job market is healing. We’re creating enough jobs to at least keep the unemployment rate stable,” Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pa., said before the report. “House prices are rising, and that’s helping to improve confidence.”
Economists at Moody’s Analytics are the most accurate consumer-confidence forecasters in the two years through January, according to Bloomberg calculations.
The median forecast of 76 economists surveyed by Bloomberg projected an increase to 62. Estimates ranged from 58 to 66.5. The measure averaged 53.7 in the recession that ended in June 2009.