U.S. consumer confidence improved in February, topping all forecasts and snapping a three-month losing streak, after the U.S. government ended the longest shutdown in the country’s history and the trade war edged toward a resolution.
The confidence index climbed to 131.4 from 121.7, the New York-based Conference Board said in a report Tuesday. That compared with a Bloomberg survey of economists that called for a rise to 124.9. The measure gauging Americans’ views on present conditions rose to an 18-year high while consumer expectations posted the largest monthly gain since 2011.
The increase comes amid a solid job market and a rally in stocks that have offered consumers reasons to look past uncertainty surrounding the longest-ever government shutdown and trade war with China. The Federal Reserve’s pledge to be patient on raising interest rates may also be supporting the economic outlook. The gauge is in line with other sentiment indicators for February that show Americans are more upbeat. The University of Michigan’s sentiment rebounded from a two-year low and topped projections, while the Bloomberg Consumer Comfort expectations measure also snapped back, posting the biggest jump in a decade.
“Consumers continue to view both business and labor market conditions favorably,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. “Expectations, which had been negatively impacted in recent months by financial market volatility and the government shutdown, recovered.”
The share of respondents saying business conditions will be better in six months increased to the best level since November. The labor differential, which measures the gap between respondents who say jobs are plentiful and those saying they’re hard to get, climbed to an 18-year high, a sign the labor market remains strong. Buying plans for cars, homes and major appliances all declined.