Consumer Sentiment Spikes in February Amid Health Concerns

U.S. consumer sentiment figures for February came in higher than expected despite the recent outbreak of the coronavirus.  Consumer sentiment rose to 101.0 in February, nearly matching the expansion peak of 101.4 set in March 2018, according to the University of Michigan Surveys of Consumers.  Economists polled by Dow Jones expected February consumer sentiment to come in at 99.5.

Consumers’ assessment of current economic conditions were virtually unchanged from January while expectations rose slightly.

The February Consumer Sentiment Index was just ahead of last month’s 99.8 and significantly above last February’s 93.8. The Expectations Index rose to 92.1 in February, up from 90.5 in January and well above last February’s 84.4. Only one survey in the past three years was slightly higher, at 93.5 in May 2019.

“Current personal finances as well as evaluations of the national economy each posted large gains,” said Richard Curtin, chief economist for the Surveys of Consumers, in a statement. “Net gains in household income and wealth were reported more frequently in early February than at any prior time since 1960.”

He also noted the coronavirus outbreak — which capital markets have been grappling with in recent weeks — is still not a major concern for consumers as just 7% of survey respondents mentioned it “when asked to explain their economic expectations in early February.”

Source: CNBC/University of Michigan Surveys of Consumers