The Feb Conference Board Consumer Confidence figure at 70.8 was well above expectations of 63, up from 61.5 in Jan and the best in a year. The gain was led by the Expectations component which rose by 11.3 pts. The Present Situation rose by 6.2 pts. The answers to the labor market questions were the key in the bounce overall as those that said jobs were Plentiful rose to match the highest since Jan ’09 and those that said jobs were Hard To Get fell to the lowest since Nov ’08. Business Conditions were little changed for those that said things are Good but fell sharply for those that said things are Bad. Notwithstanding the improved confidence, those that plan to buy a home within 6 mo’s fell to the lowest Aug but those that buy to plan an automobile rose .5 pt. Those that plan on taking a vacation within 6 mo’s fell to the lowest since June. One year inflation expectations were unchanged at 5.5% BUT the cutoff for this survey was Feb 15th when gasoline prices were almost .20 lower. Bottom line, a better labor market has offset the consistent rise in gasoline prices in boosting confidence but as stated earlier, today’s confidence number doesn’t fully reflect the sharp rise we’ve seen of late. Putting the 70.8 confidence reading in perspective, it compares with the 10 yr average of 79.4 with the high of 111.9 in July ’07 (the high of economic activity) and 25.30 in Feb ’09 (the low of economic activity) and thus is a coincident indicator, not a leading one.
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