Consumer Spending Will Continue to Support Economic Growth Through First Half
The Conference Board Consumer Confidence Index® improved slightly in February, following an increase in January. The Index now stands at 130.7 (1985=100), up from 130.4 in January. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – decreased from 173.9 to 165.1. However, the Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – increased from 101.4 last month to 107.8 this month.
“Consumer confidence improved slightly in February, following an increase in January,” said Lynn Franco, Senior Director of Economic Indicators. “Despite the decline in the Present Situation Index, consumers continue to view current conditions quite favorably. Consumers’ short-term expectations improved, and when coupled with solid employment growth, should be enough to continue to support spending and economic growth in the near term.”
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was February 13.
Consumers’ assessment of current conditions was less favorable in February. Those claiming business conditions are “good” declined from 40.0 percent to 38.6 percent, while those claiming business conditions are “bad” increased, from 10.4 percent to 11.9 percent. Consumers’ assessment of the job market also moderated from last month. Those saying jobs are “plentiful” decreased from 47.2 percent to 44.6 percent, while those claiming jobs are “hard to get” increased from 11.9 percent to 14.8 percent.
Consumers were more optimistic about the short-term outlook. The percentage of consumers expecting business conditions will improve over the next six months increased from 18.4 percent to 20.4 percent, while those expecting business conditions will worsen declined, from 8.6 percent to 7.4 percent.
Consumers’ outlook for the labor market was mixed. The proportion expecting more jobs declined slightly from 16.5 percent to 16.2 percent, but those anticipating fewer jobs in the months ahead also decreased, from 12.9 percent to 11.1 percent. Regarding their short-term income prospects, the percentage of consumers expecting an increase rose from 21.6 percent to 22.0 percent, while the proportion expecting a decrease declined from 8.0 percent to 6.7 percent.
Source: February 2020 Consumer Confidence Survey®
The Conference Board / Release #6157
The Conference Board publishes the Consumer Confidence Index® at 10 a.m. ET on the last Tuesday of every month. Subscription information and the technical notes to this series are available on The Conference Board website:
About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org.
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.