Summary: US consumer confidence rises in February; Conference Board index increases, more than expected; view of present conditions improve, views of future conditions slip slightly; economic growth “not slowed further”, consumers “cautiously optimistic” overall.
After the GFC in 2008/09, US consumer confidence clawed its way back to neutral over a number of years and then went from strength to strength until late 2018. Measures of consumer confidence then oscillated within a fairly narrow band at historically high levels until they plunged in early 2020. Subsequent readings have fluctuated around the long-term average.
The latest Conference Board survey held during the first week-and-a-half of February indicated US consumer confidence improved compared with the previous month. February’s Consumer Confidence Index registered 91.3, above the median consensus figure of 90 and more than January’s final figure of 88.9. Consumers’ views of present conditions improved while their views regarding future conditions deteriorated slightly compared to those held at the time of the previous survey.
Lynn Franco, a senior director at The Conference Board, said the increase in the current conditions index after declining for three months “suggests economic growth has not slowed further.” She described US consumers as “cautiously optimistic, on the whole”.
US Treasury bond yields moved very little on the day. By the close of business, the 2-year yield Treasury bond yield remained unchanged at 0.11%, the 10-year yield had slipped 1bp to 1.35% and the 30-year yield finished unchanged at 2.18%.
In terms of US Fed policy, expectations of any change in the federal funds rate over the next 12 months maintained a neutral bias. Federal funds futures contracts for February 2022 implied an effective federal funds rate of 0.095%, about 2bps above the current spot rate.