Did Consumer Attitudes Survive the Polar Vortex and Heating Bills?
The economy remains sluggish, but consumer sentiment is showing signs of life. According to Thomson Reuters/University of Michigan’s final reading, consumer sentiment increased to 81.6 in February compared to a reading of 81.2 seen earlier in the month and the final January number.
Contrary to recent economic reports, the results were slightly better than expected, as consumers overcame lower temperatures and higher utility bills. On average, economists expected the index to reach 81.3 this month. In 2013, consumer sentiment ranged from a low of 73.2 in October to a high of 85.1 in July.
“The most significant implication is not whether consumers have correctly assessed the weather’s negative impact on the economy, but the resilience consumers have demonstrated in the face of the polar vortex as well as higher utility bills and minimal employment gains,” survey director Richard Curtin said in a statement.
During the last recession, the index averaged slightly above 64. In the five years before the financial crisis, it averaged almost 90. Consumer sentiment is one of the most popular measures of how Americans rate financial conditions and attitudes about the economy. The University of Michigan’s Consumer Survey Center questions 500 households each month for the index.
Current economic conditions, which measure whether Americans think it is a good time to make large investments, edged higher, to 95.4, from the preliminary reading of 94, matching estimates. However, February’s final reading was below the 96.8 seen in January. Consumer expectations declined to 72.7 in the final reading from the initial 73 but improved from 71.2 in January. Economists expected a reading of 71.5. The one-year inflation expectation was 3.2 percent.
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