A monthly survey of consumer confidence shows Americans are feeling better about the state of the economy than they have in a while.
Every month, the New York–based Conference Board business research group asks Americans two big questions: how they think the economy is doing, and how they expect things to be in about six months. The results of the board’s Consumer Confidence Survey for February show Americans’ optimism spiked again after dropping for three straight months — a period that included the five-week U.S. government shutdown.
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Why does this matter?
Consumer confidence is important because a bright outlook on the economy tends to mean more spending, which can help fuel the economy further.
The Conference Board said its consumer confidence index was 131.4 for February, up from 121.7 in January. The last time Conference Board saw such high consumer optimism was in late 2000, according to reports from both Bloomberg and Associated Press.
With unemployment at its lowest level in decades, a healthy labor market and the government shutdown in the rearview mirror, the economic benefits are tangible to many Americans. In this latest Consumer Confidence Survey, more Americans said they expect business conditions will be better in the next six months compared to previous months. This follows a recent positive Gallup Survey reflecting that Americans are feeling pretty good about the financial shape they’ll be in next year.
What else you should know
Along with that optimism, there are some mixed signals about how the U.S. economy is doing.
A survey from Duke University indicated that some business executives expect a recession to hit by the end of the year. And while the Conference Board data showed higher consumer confidence generally, it was unclear whether this rebound will lead to more consumer spending. The board said February data also showed a decline in consumers’ plans to buy big ticket items like cars, homes and large appliances.
In addition, the U.S. Department of Commerce reported falling retail sales at the end of 2018, and the Federal Reserve recently halted interest rate increases due to concerns over the health of the economy.
Still, the recent Gallup and Consumer Confidence surveys indicate a far more positive outlook, with many people seeming to shrug off events like the government shutdown and uncertainty over the global economy and trade issues — and focusing more on day-to-day positives like the thriving job market.