The payment: Americans grew more confident about the economy in February after the government increased stimulus payments to families and sharply reduced coronavirus cases. However, they remained concerned about how long the pandemic will last.
The consumer confidence index rose from 88.9 in January to a three-month high of 91.3 in February. The conference board said Tuesday.
Economists polled by Dow Jones and The Wall Street Journal had forecast a slight increase to 91.0.
However, consumer confidence is still well below pre-pandemic levels. The index was 132.6 before the virus outbreak last year.
What happened: An index measuring how consumers are currently feeling about the economy rose from 88.5 to 92 for the first time in four months.
The government sent $ 600 to most families in January, increasing unemployment benefits for millions of unemployed Americans. At the same time, the record spike in coronavirus cases began to subside late last year, which contributed to a more positive tenor for the economy.
“This reversal of course suggests that economic growth has not slowed any further,” said Lynn Franco, senior director of economic indicators on the nonprofit board.
Another measure that measures how Americans see the next six months – called the Future Expectation Index – fell from 91.2 to 90.8. This reflects the ongoing uncertainty about the path of the virus, even as more Americans are being vaccinated.
A positive sign: the number of people planning vacations has increased again, especially for those flying or planning to travel outside of the United States
Other measures of confidence, including the consumer sentiment survey and Morning Consult’s daily report, have also risen. The Morning Consult survey is part of the MarketWatch Coronavirus Recovery Tracker
The big picture: After a coronavirus-induced soft patch late last year, the economy is on the mend again. However, the rate of growth will depend on how quickly the vaccines are given and the virus begins to fade. The answers are still unclear for the time being.
What do you say? “Be sure that consumers become increasingly confident in the coming months as the economy reopens and the vaccines are distributed. The warmer weather won’t hurt either, ”said senior economist Jennifer Lee of BMO Capital Markets.
Market reaction: The Dow Jones Industrial Average DJIA,
and S & P 500 SPX,
fell in Tuesday trades.
Investors searched the Latest comments from Federal Reserve Chairman Jerome Powell while testifying before the US Senate. Powell reiterated his view that inflation is likely to remain mild and that the economy should improve over the course of the year.