In zig-zagging economic reports on Tuesday, investors first had to swallow more bad news about home prices, but then they got at least something of a tonic when consumer confidence figures showed a big increase in that key measure.
An hour after the S&P Case-Shiller Home Price Index for December 2011 showed home prices falling another 4% year-over-year, the Conference Board released its February 2012 Consumer Confidence Index. And it was more encouraging. After dropping to 61.5 in January (1985=100), the reading rose in February to 70.8.
That’s the best mark since hitting 72 in February 2011. And it’s considerably better than the 64.4 expected by economists surveyed by Dow Jones Newswires.
Conference Board Director Lynn Franco said, “Consumers are considerably less pessimistic about current business and labor market conditions than they were in January. And, despite further increases in gas prices, they are more optimistic about the short-term outlook for the economy, job prospects, and their financial situation. ”
The cut-off date for the February survey was Feb. 15, and since then gasoline prices have only risen further, so it remains to be seen if consumers will be as sanguine when the March report gets compiled next month.
Current business conditions and the labor market were two areas where consumers in February saw clear improvement.
Regarding the former, the report noted, “Those claiming business conditions are ‘good’ increased slightly to 13.3 percent from 13.2 percent, while those claiming business conditions are ‘bad’ decreased to 31.2 percent from 38.3 percent.”
Regarding the job market, consumers were “also less pessimistic,” said the report. “Those stating jobs are ‘plentiful’ increased to 6.6 percent from 6.2 percent, while those saying jobs are ‘hard to get’ decreased to 38.7 percent from 43.3 percent.”