Consumer Confidence Moves Higher in February, but Remains Sub-Par

By February 15, 2013Economy

The University of Michigan and Thomson Reuters report that consumer confidence moved higher from 73.8 in January to 76.8 in February. This was the second consecutive monthly gain, with the Consumer Sentiment Survey index plummeting post-election from 82.7 in November to 72.9 in December on fiscal cliff worries. Americans remained downbeat in January, with many of them reacting negatively to higher payroll taxes.

Perceptions about the current and future economic environment improved for the month. The index for present conditions rose from 85.0 to 88.0 for the month; whereas, the forward-looking index increased from 66.6 to 68.7. Even with February’s higher numbers, sentiment remains sub-par. Americans remain less positive than they were in November (which had been a 5-year high) and well below an ideal index value of closer to 100. The simple truth is that confidence has been more subdued because of slowly advancing economic growth, elevated unemployment rates, higher taxes, and other pocketbook issues.

Inflationary expectations in the University of Michigan survey remain modest. Consumers expect prices to rise 3.3 percent over the next 12 months, the same pace as was predicted last month but up from the 3.1 percent rate predicted in November.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM), where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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