Consumer Sentiment in Feb. Rose to Second Highest Level Since '04
Ann Arbor, MI, March 2, 2018-Consumer sentiment rose 4.2% to 99.7 in February, from January’s 95.7 rate, according to final results from the University of Michigan Survey of Consumers.
The represents a 3.5% increase year over year.
“Consumer sentiment remained quite favorable in February, at its second highest level since 2004,” said Survey of Consumers chief economist, Richard Curtin. “Consumers based their optimism on favorable assessments of jobs, wages, and higher after-tax pay. The highest proportion of households since 1998 reported that their finances had improved compared with a year ago and anticipated continued gains during the year ahead. Economic news heard by consumers continued to be dominated by the tax reform legislation and net job gains, which was untarnished by the consensus view that interest rates would increase and stock prices would remain volatile. Although rising interest rates was seen as a reason to temper their longer term outlook for the overall economy, only a modest moderation in the pace of economic growth was anticipated. Although consumers expected the unemployment rate to dip below 4% in 2018, only modest wage growth was anticipated, and inflation expectations have remained unchanged. Interest rates, even when pushed higher in the weeks and months ahead, will not cause postponement of discretionary purchases as long as income continues to rise near its present pace. Personal tax cuts are crucial to spur additional spending, but unlike prior cuts that had an immediate positive impact, this tax cut has not generated universal support across partisan lines. Overall, the data signal an expected gain of 2.9% in real personal consumption expenditures during 2018.”