Consumer confidence stays level
Saying consumers have displayed “remarkable resilience” in the face of harsh winter weather, higher utility costs and slow employment gains, the University of Michigan and Thompson Reuters said its February survey showed consumer confidence essentially unchanged since December.
The Index of Consumer Sentiment was 81.6 this month, compared with 81.2 in January. That marked a 5.2-percent improvement over a year ago.
According to the survey, the winter weather had the largest impact on consumers older than 65, mostly due to higher utility costs. Those younger than 35 were least impacted, reflected in gains in income and unemployment, the survey found.
Upper-income individuals and older consumers have been encouraged by gains in home and stock values, while younger consumers, most affected by the aftermath of the Great Recession, are optimistic in their outlook, the survey said. The younger consumers said they expect a 5 percent annual gain in household income, the highest since 2006. All other age groups expect gains of a more modest 0.4 of a percentage point.
Despite harsh weather that often made trips to the store less than ideal across the country, the survey’s data suggest purchases were postponed rather than canceled. Vehicle buying by middle-income consumers declined as they reported fewer discount. Meanwhile, home buying and selling attitudes remained unchanged with low mortgage rates being the main appeal for consumers over prices.
Chief Economist Richard Curtin was optimistic in his outlook of consumer confidence, based on the little impact weather and utility costs have showed on confidence.
“This reaction stands in sharp contrast to the instability in confidence associated with the government shutdown and policy stalemates in the past few years,” he said. “Without another self-inflicted D.C. shock in the off-year election, consumers are prepared to renew the pace of spending in the months ahead, with an overall gain of 2.6 percent in 2014.”
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