Consumer Confidence Surges in February

Consumer confidence dipped slightly in December, recovered partially in January and surged in February to the highest level since November 2000, according to The Conference Board’s February Consumer Confidence Survey. The composite value of consumer confidence in February was 130.8, up from 124.3 in January (1985=100). The three-month moving average (3MMA) increased from 125.3 in January to 126.1 in February, which was 12.4 points higher than in February last year. Consumer confidence is a driver of consumer spending, which is the largest component of GDP and ultimately drives a large portion of steel consumption.

In February, the 3MMA of the composite increased by 0.73 points to 126.1 points. We prefer to smooth the data with a moving average because of monthly volatility, which in the case of consumer confidence has been quite extreme since the beginning of 2016. The composite index is made up of two sub-indexes. These are the consumer’s view of the present situation and his or her expectations for the future. Both are now above their nine-year trend line (Figure 1).