US consumer confidence collapsed in late 2007 as the US housing bubble burst and the US economy went into recession. By 2016, it had clawed its way back to neutral and then went from strength to strength over the next two years. After a dramatic fall in December and January, confidence levels of US households appears to have bounced back after a series of temporary factors faded from view.
The latest Conference Board survey indicates US consumers have shaken off their worries from December and January. The latest reading came in at 131.4, up from January’s revised reading of 121.7 and back to a historically high level.
The consensus expectation prior to the report was for a reading of around 124. However, despite a considerably-higher result, US bond yields still finished the day lower. 2-year, 10-year and 30-year Treasury bond yields all shed 2bps to 2.48%, 2.64% and 3.07% respectively.
A month ago, Lynn Franco, The Conference Board’s Director of Economic Indicators, had said January’s figures were likely to be affected by temporary factors. At the time, the federal shutdown had yet to be resolved and the Federal Reserve’s position on future rate rises was still a concern.