The Conference Board reported that its Consumer Confidence Index rose from 58.4 in January to 69.6 in February. This increase stops a three-month skid, and the rebound is consistent with the similar rise in confidence observed in the University of Michigan survey. A large part of the steep decline in January could be explained by the increase in payroll taxes. Even with this month’s gain, though, the Conference Board index remains below the optimism level observed in October (73.1).
Looking specifically at the Conference Board data, the increase occurred because respondents were more positive in their assessments of the current and future economic environments. These types of sentiment surveys tend to respond to pocketbook issues. There were marginal gains in the belief that jobs were more plentiful and in income expectations. Still, it remains true that unemployment and income are challenges, with each measure a net negative overall.
Despite this improvement, buying intentions were mixed. There was a drop in the percentage of individuals saying that they planned to purchase a motor vehicle (from 10.4 percent to 11.1 percent). But, those intending to purchase a home or an appliance edged slightly lower (from 5.4 percent to 3.7 percent and from 48.8 percent to 46.7 percent, respectively).
Chad Moutray is the chief economist, National Association of Manufacturers.