Economic Picture is Looking Up: Consumer Confidence Spikes
We're beginning to feel better about the economy. Consumer confidence in February rose dramatically to the highest level since a year ago when the economy's outlook started to look brighter before souring again.
"This time a year ago, we were two years out from the end of the recession and it looked like the economy was finally starting to pick up some steam, so we were very disappointed this past summer when that didn't happen and we saw a big plunge in already relatively low consumer confidence," said Ken Goldstein, Economist with the Conference Board. "Over the past few months, we have gotten enough good news on jobs to allow consumers to come back to where we were a year ago and to allow expectations that this time around we are going to be rewarded with decent economic news."
The Conference Board's consumer confidence now stands at 70.8, up from a revised 61.5 in January. Analysts had expected a reading of 63. The February reading marks the highest level since February 2011 when it was 72.0. The index is still far below the 90 that indicates a healthy economy.
"Consumers worry most about jobs, income and gas prices in that order," said Goldstein. "If we continue to get even 200,000 new jobs and decent news when it comes to income, consumers will continue to spend while they gas up."
While gas prices are heading upward across the country, Goldstein doesn't expect it to become too much of an issue when it comes to consumer confidence. "Of course there is concern about how high the price of gas is going to go and how long it will stay at those prices. But, natural gas prices aren't as high now as they were a year and two years ago. So, gas prices are going up, but the price of home heating oil and electricity are not. That makes it much different from earlier spikes in oil prices," he said.