What? Us Worry? Consumer Confidence Gained In February

Just like stock market investors, who have driven most equities indices to near record levels, consumers seem to be shrugging off the federal government dysfunction. Both major indexes of consumer confidence rose in February, as consumers focused on the improving jobs market.

The final February reading on consumer sentiment from Thomson Reuters/University of Michigan Surveys of Consumers surprised observers again, rising to 77.6 from the final January reading of 73.8. Economists polled by Reuters had expected the index to hold at the 76.3 measured in the preliminary mid-month reading. The current conditions and expectations measures also rose.

The Conference Board’s Consumer Confidence Index, which is always more volatile than the UM index, spiked more than 10 points from January to finish at 69.6. The research group’s Current Situation and Expectation Indexes also rose sharply.

Lynn Franco, the group’s director of economic indicators, said, “Consumer Confidence rebounded in February as the shock effect caused by the fiscal cliff uncertainty and payroll tax cuts appears to have abated.” She added, “Looking ahead, consumers are cautiously optimistic about the outlook for business and labor market conditions.” Income expectations also rose slightly.