Consumer confidence scaled a one-year high in February as optimism about the labor market offset concerns over rising gasoline prices, an independent survey showed on Tuesday.
GUS FAUCHER, SENIOR MACROECONOMIST, PNC FINANCIAL SERVICES, PITTSBURGH
The job market is looking a lot better and people are feeling a whole lot better. I don't expect a big rebound in consumer spending. People are still cautious about spending after what they went through over the past several years. We are looking at steady spending and overall economic growth.
People are looking at the stock market so that's helping the outlook on wealth. Another piece of good news is higher gasoline prices have not dented the consumer confidence yet.
We are at or at least getting close to the point of self-sustained growth where stronger job growth drives income which drives spending.
MIKE SHEA, A MANAGING PARTNER AND TRADER AT DIRECT ACCESS PARTNERS LLC IN NEW YORK
This is a decent number. It has been a while since we've seen a number above 70, and this continues the trend we've seen over the past few months where we're getting data that indicates things are getting better.
There's a lot of technical work being done that says 1,370 is a critical number. From that standpoint, it would be good for us to close above 1,370. But we've not had really meaningful volume yet in this rally, and people might want to take something off the table as we exit earnings season. If we get any sort of uptick in volume, that will be very positive for the market. If volume stays at this level, it might be more likely that we pull back.
TOM PORCELLI, CHIEF U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
Clearly this is a robust outcome to say the least as the underlying data has improved. The big question is how will consumers respond to higher energy and gasoline prices. The recent increases did not find their way into this, so it will be interesting to see how they will respond in the months ahead.
DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS
February's consumer confidence index as measured by the Conference Board of 70.8 is well above the consensus of 63.0, and a sharp rebound from January's 61.5 (revised from 61.1), more than fully reversing a surprise dip from 64.8 in December. With a decline in the preliminary February Michigan CSI having been revised away in the final release consumers are taking a more optimistic view in a variety of surveys, with both the Conference Board and Michigan CSI indices at 12 month highs.
Positive employment data has clearly lifted employment perceptions and the Conference Board data is sensitive to that, but the breakdown suggests optimism has increased well beyond the view on jobs. Buying plans however, do look quite restrained.
(Americas Economics and Markets Desk)