A report released by the Conference Board on Tuesday showed a much bigger than expected improvement in U.S. consumer confidence in the month of February.
The Conference Board said its consumer confidence index jumped to 130.8 in February from a downwardly revised 124.3 in January.
Economists had expected the consumer confidence index to edge up to 126.4 from the 125.4 originally reported for the previous month.
With the much bigger than expected increase, the index reached its highest level since hitting 132.6 in November of 2000.
“Despite the recent stock market volatility, consumers expressed greater optimism about short-term prospects for business and labor market conditions, as well as their financial prospects,” said Lynn Franco, Director of Economic Indicators at the Conference Board.
She added, “Overall, consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead.”
Reflecting the increased optimism, the report said the expectations index climbed to 109.7 in February from 104.0 in January.
The percentage of consumers expecting business conditions to improve over the next six months rose to 25.8 percent from 21.5 percent, while the percentage expecting conditions to worsen dipped to 9.4 percent from 9.8 percent.
The outlook for the job market was also more positive, as consumers expecting more jobs in the months ahead increased to 21.6 percent from 18.7 percent and those anticipating fewer jobs edged down to 11.9 percent from 12.5 percent.
Consumers’ assessment of current conditions was also more favorable, with the present situation index rising to 162.4 in February from 154.7 in January.
The percentage of consumers saying business conditions are “good” inched up to 35.8 percent from 35.0 percent, while the percentage saying conditions are “bad” fell to 10.8 percent from 13.0 percent.
Franco said the labor force was the main driver, as consumers claiming jobs are “plentiful” rose to 39.4 percent from 37.2 percent and those claiming jobs are “hard to get” fell to 14.7 percent from 16.3 percent.
On Friday, the University of Michigan is scheduled to release its revised report on consumer sentiment in the month of February.
The consumer sentiment index for February is expected to be downwardly revised to 99.5 from the preliminary reading of 99.9, although that would still be up from the final January reading of 95.7.