US Consumer Sentiment Rises Again In February Amid Economic Growth & Easing Inflation
Discover how the US consumer sentiment rises again in February amid the economic growth and easing of inflation.
Author:Paula M. GrahamReviewer:Hajra ShannonFeb 19, 20243.2K Shares104.8K Views
US consumer sentiment rises again in February. The University of Michigan's latest consumer sentiment index for February has revealed a third consecutive monthly increase, reaching 79.6, slightly below the expected 80. Despite challenges such as rising producer prices and a drop in retail sales, consumers remain optimistic. Joanne Hsu, the director of the survey, highlighted the positive trend, stating, "Consumers continue to feel more assured about the economy."
Investors Maintain Confidence Amidst Economic Uncertainties
Amidst a volatile week in the markets, investors and consumers stay undeterred. The stock market reached a record high, reflecting the optimism seen in Bank of America's data, where economic outlook confidence hit a two-year peak. Despite concerns over inflation, consumers express confidence in the resilience of labor markets and the ongoing slowdown in inflation.
A Bank of America economist, Michael Gapen, acknowledges the recent economic data's choppiness and confusion, advising investors to remain in a "wait-and-see mode."
The report notes, "The data flow at the turn of the year has been choppy and confusing. Our (perhaps unsatisfying) take is that investors should remain in wait-and-see mode. The surprises in jobs, inflation, retail sales, and [industrial production] were all probably a combination of signal and noise. ... We need to see a few more weeks' worth of data before drawing strong conclusions on the trajectory of the economy."
Consumer Sentiment Reflects Growing Confidence Despite Challenges
The University of Michigan's consumer sentiment index, climbing to 79.6 in February from 79 in January, underscores a positive shift in Americans' economic outlook. While sentiment remains below the long-run average, the continuous improvement over the past three months indicates increasing confidence. Joanne Hsu emphasizes consumers' belief in the sustained slowdown of inflation and the strength of labor markets.
Top White House economic adviser Lael Brainard attributes the brighter outlook to the rise in real wages, wealth, business creation, and job opportunities during President Joe Biden's term. The report highlights consumer expectations for business conditions over the next five years reaching their highest level since December 2020.
Despite a partisan gap in economic perceptions, the overall sentiment gain is driven by Republicans, with a rise from 56.3 to 65. Independents show a modest increase, while Democrats experience a slight decline.
Additional confidence measures, including Morning Consult's daily survey and the Conference Board's CEO confidence index, further indicate a positive trend in consumer and corporate sentiment.
Conclusion
The US consumer optimism grew in February despite economic ups and downs. The University of Michigan's index rose for the third month, reaching 79.6. Although inflation and retail challenges surfaced, people remained confident. Investors stayed positive, marking record highs in the stock market. The data might be confusing, but experts suggest waiting for more information. Overall, Americans are feeling better about the economy, with hopes for continued progress and stability.
Paula M. Graham
Author
Hajra Shannon
Reviewer
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