Consumer Confidence Sees a Rise in February

Nancy Lazar, chief global economist at Piper Sandler, discusses how factors like increasing consumer confidence and the job market can impact financial strategies.

Consumer confidence improved in February, thanks to positive U.S. household expectations regarding the job market. The Conference Board’s Consumer Confidence Index increased by 2.2 points to reach 91.2, compared to a revised January figure of 89. Initially, January’s data was reported as the lowest in almost a decade at 84.5.

Interestingly, economists from LSEG predicted the February index would show a reading of 87.

Inflation Measures Remain Elevated

“After a drop in January, consumer confidence bounced back in February. There’s perhaps a little more optimism ahead,” said Dana M. Peterson, chief economist at the Conference Board. “While four out of the five components of the index are strong, it’s worth noting that the overall index is still significantly below the peak we observed in November 2024.”

Moreover, the current situation index from the Conference Board has seen a decline, with a drop of 0.7%. The perception of employment conditions has slightly improved, as there was a minor rise of 0.6 points in the percentage of consumers who perceive jobs as “abundant” over those who find them “difficult to find,” now standing at 7.4%.

Three components of the Expectations Index recorded slight increases, indicating a less negative outlook for business and labor market conditions in the next six months, alongside a more positive expectation for incomes.

Unexpected Slowdown in Economic Growth

Republicans and independents reported increased consumer confidence, while Democrats continued to show a decline in optimism.

A notable trend is that younger consumers—those under 35—expressed the highest levels of confidence in February, whereas confidence among those over 35 has dipped. Interestingly, Gen Z participants mirrored this optimism, contrasting with the older generations surveyed.

The labor market added about 130,000 jobs in January, as suggested by a delayed report.

Despite these indicators, Peterson highlighted a continued sense of pessimism among consumers regarding economic factors. Price concerns and inflation remain top-of-mind issues. References to trade and political factors also saw an uptick in February, while mentions of the labor market and immigration softened a bit.

Interestingly, consumers reported a decline in their current financial situation after an unexpected rise in January, but their outlook regarding future finances retained a sense of caution.

Responses to plans for purchasing major items showed improvement in February—more consumers indicated they were likely to buy big-ticket items like used cars, furniture, televisions, and smartphones in the next six months.