As the month of February quickly comes to a close, it seems as though the confidence consumers have in their spending is steadily increasing. Bloomberg discovered in its recent survey that the confidence in U.S. consumers is currently the highest it has been in a year.
Up from 61.5 in January, the Conference Board’s consumer confidence index increased to 70.8. That is a large leap from the 63 economists were expecting from the period ending February 19. It’s great that consumer confidence is increasing, but what is the cause? Bloomberg attributes this confidence increase to increased hiring, higher stock prices and a decrease in the amount of firings. With the BLS jobs report coming out later this week, statistics may reveal even more reasons why U.S. consumers have more confidence in their spending.
The increase in consumer confidence is especially great news as a 44-cent increase in the price of a gallon of gasoline was thought to hurt consumer’s confidence and spending habits. Drew Matus, senior U.S. economist at UBS Securities LLC in Stamford, Connecticut was quoted saying, “The consumer feels better. Gas prices are certainly a worry for folks, but you don’t want to discount the fact that the labor market continues to have legs.”
As U.S. consumers begin to feel better about their spending, it seems they feel better about the job market as well. 18.7 percent of the Conference Board’s respondents expected more jobs to become available in the next six months. That’s an increase from the 16.4 percent that said the same thing in January. Furthermore, 15.4 percent of respondents expect their incomes to rise over the next six months- an increase from 13.8 percent in January. In addition to all of these increases, the percentage of people that said jobs are currently difficult to get dropped from 43.3 percent to 38.7 percent, the lowest number we’ve seen since November 2008.
This is all great news for the economy and the U.S. job market. As we prepare for the February jobs report, it would not be wrong to think that the statistics will be a bit of an improvement from January. Of course, we will just have to wait and see.