Following a modest increase in January, the Consumer Confidence Index increased in February to stand at 130.8, marking its highest level since 2000, according to data released by The Conference Board today.
While stock market volatility at the start of the year threatened to douse an upbeat mood, consumers’ assessment of current conditions was more favorable this month, with the labor force the main driver, according to Lynn Franco, director of economic indicators at The Conference Board.
“Despite the recent stock market volatility, consumers expressed greater optimism about short-term prospects for business and labor market conditions, as well as their financial prospects,” Franco added. “Overall, consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead.”
The Present Situation Index increased from 154.7 to 162.4, while the Expectations Index improved from 104 in January to 109.7 this month, The Conference Board noted.
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Naveen Jaggi, president of Retail and Capital Markets for JLL, also noted that recent tax cuts likely played a role in helping consumers remain positive amid the recent meltdown in financial markets.
“This bodes well for retailers, as most consumers found extra discretionary income in their paychecks,” he added. “The recent market volatility would only potentially impact the luxury sector, as those consumers have more income tied up in the markets — there would need to be sustained periods of negative news coming from the markets to impact most retail sectors.”
In early February, the Dow Jones industrial average shed a panic-inducing 1,300 points, stoked by fears of rising interest rates and inflation.
Meanwhile, the unemployment rate hovers at a low 4.1 percent.
Consumer confidence also notably hit a 15-year high in February 2017.