Confidence in the economy rose again in February but hopes for further improvement in the near future stumbled.
The index of consumer confidence rose to a three-month high of 91.3 in February, the Conference Board said Tuesday. In January, the index stood at 88.9.
Economists had expected a rise to 90.
Consumer confidence has far to go before it catches up with pre-pandemic levels seen during the Trump administration. The index stood at 132.6 a year ago.
“After three months of consecutive declines in the Present Situation Index, consumers’ assessment of current conditions improved in February,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “This course reversal suggests economic growth has not slowed further.”
The expectations component of the index dipped, perhaps because Americans were initially overly optimistic about the speed of vaccinations.
More Americans are, however, planning on traveling for vacation, including plans to travel outside the U.S., Franco said.
Notably, vacation intentions—particularly, plans to travel outside the U.S. and via air—saw an uptick this month, and are poised to improve further as vaccination efforts expand.”
The share of consumers claiming business conditions are “good” increased from 15.8 percent to 16.5 percent, while the percent claiming business conditions are “bad” fell from 42.4 percent to 39.9 percent. The portion expecting business conditions will improve over the next six months fell from 34.1 percent to 31.0 percent. At the same time, the proportion expecting business conditions will worsen also declined, from 19.0 percent to 17.7 percent.
Despite a rise in layoffs, views of the labor market also improved. The percentage of consumers saying jobs are “plentiful” increased from 20.0 percent to 21.9 percent, while those claiming jobs are “hard to get” declined from 22.5 percent to 21.2 percent. The share expecting more jobs in the months ahead fell from 30.4 percent to 26.1 percent, while those anticipating fewer jobs also declined, from 22.1 percent to 20.6 percent.
Regarding short-term income prospects, 15.2 percent of consumers expect their incomes to rise in the next six months, down from 15.8 percent in January. That was somewhat offset by a decline in pessimism, with just 13.2 percent expect their incomes to decrease, down from 15.5 percent last month.
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