February Consumer Confidence

February 28, 2006 – The Conference Board’s Consumer Confidence Index fell by 5.1 index points to 101.7 in February, but remained at the upper end of its range since the start of this expansion (Chart 1).

Chart 1. Consumer Confidence. Index. February 1967 through February 2006.

Consumers’ appraisals of current economic conditions were little changed in February. The present situation index edged up by 0.5 index points to 129.3 – reaching a new expansion high (Chart 2).

Chart 2. Consumer Confidence, Present Situation. Index. February 1967 through February 2006.

However, the more volatile expectations index fell by 8.8 index points to 83.3 in February (Chart 3).

Chart 3. Consumer Confidence, Expectations. Index. February 1967 through February 2006.

As noted in the Conference Board’s press release, it could be a bad omen for the consumer spending outlook if these expectations continue to fall.

In the meantime, consumers remained relatively impressed by current conditions in the labor market. The net of portion of consumers reporting that jobs are currently “plentiful” (the percentage reporting that jobs are “plentiful” minus the percentage reporting that jobs are “hard to get”) edged down by 0.1 percentage point to 6.6% in February – about unchanged at its highest level since the last recession (Chart 4).

Chart 4. Consumer Confidence, Net Percentage Reporting Jobs Currently 'Plentiful'. July 1977 through February 2006.

Bottom line: Consumer confidence remained relatively strong in February.

Suzanne Rizzo