Consumer Sentiment Jumps to Highest Level Since JuneIt was another decent week for the U.S. economy as initial jobless claims fell below the psychologically significant 400,000 level and the consumer sentiment index rose to a slightly better-than-expected 75.1 in February (preliminary) -- its highest level in eight months.

The consensus of economists surveyed by Bloomberg was that the preliminary February sentiment reading would rise to 75 from 74.2 in January. The index was 74.5 in December, 71.6 in November and 67.7 in October. At the start of the recession in December 2007, the index stood at 88.9.

"2011 has started with a couple factors that were completely absent in 2010, and one of them is confidence," Tom Porcelli, chief economist for RBC Capital Markets in New York, told Bloomberg News Friday. "Now confidence is starting to come back," which is supporting the U.S. economic recovery.

In February, the current economic conditions component of the sentiment survey surged 5 points to 86.8 in February from 81.8 in January -- its highest reading since January 2008. However, the consumer expectations component dipped to 67.6 in February from 69.3 in January.

Better Days Ahead

Consumers' outlook on inflation remained the same in February. The one-year inflation outlook was unchanged at 3.4% in February; the five-year inflation outlook, unchanged at 2.9%.

Economists, business executives, and policymakers monitor the consumer sentiment index because, historically, consumers' attitudes have correlated with their decisions to spend. In general, rising sentiment leads to increases in consumer spending, or the maintenance of a level of spending, while falling sentiment predicts the reverse.

February's preliminary consumer sentiment report is a win for the economic bulls, showing that since last autumn, Americans have become more confident that better days are ahead for the economy, and for their personal financial situations. Consumers are encouraged by rises in the stock market, by better-than-adequate corporate earnings growth and by other economic data that indicate that the 18-month recovery is gaining momentum.

The missing piece, as it has been throughout the recovery, is sustained, adequate job growth of more than 200,000 jobs per month. If that occurs, it will increase Americans' job security -- something that, at least historically, has encouraged them to commit to major financial decisions such as buying homes, starting or expanding small businesses, or buying new cars.

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darkhrse4011

More lies!

February 14 2011 at 12:31 AM Report abuse +1 rate up rate down Reply
Samir semaan

What the news about the consumer confidence is true americans start pushing hard in spending and using their own money and investing in the stock market so this will be a signal for consumers and upbeat on the recovery. The next is to reduce the budget fiscal discipline and give people in the military the negotiate what program needs to emphasize and to close the budget and close the gap in domestic spending by instituting the office of anticorruption in the FBI that will save the deficit billions of dollars yearly

February 13 2011 at 1:00 AM Report abuse rate up rate down Reply
bufortharmon

wheres the koolaide kids

February 12 2011 at 8:12 AM Report abuse rate up rate down Reply
bufortharmon

marine you are a traitor

February 12 2011 at 8:11 AM Report abuse rate up rate down Reply
bootjack

AOL wont mention that thier stocks "tanked" after aquiring Huff-Puff.

February 12 2011 at 1:08 AM Report abuse rate up rate down Reply
bootjack

SURE...FOLKS SPENT MORE. BY GOD PRICES ARE GOING UP. TAKES A REAL JOURNALIST TO FIGURE THAT ONE OUT.

February 12 2011 at 1:04 AM Report abuse rate up rate down Reply
marine1942

Obama paying back the unions---Will NEVER buy from Government Motors

February 11 2011 at 8:57 PM Report abuse +2 rate up rate down Reply
1 reply to marine1942's comment
jdrumerrnr

Good, go and support Japan's national healthcare.

February 11 2011 at 11:00 PM Report abuse rate up rate down Reply
mullermugs32

Slightly better than expected? that is an interesting quote.

February 11 2011 at 8:49 PM Report abuse +3 rate up rate down Reply
riciad

At least care about these people. It could be you, a family member or a friend!!
Just at least care...

February 11 2011 at 6:23 PM Report abuse -1 rate up rate down Reply
1 reply to riciad's comment
warrenbent

How do you know Chris doesn't "care"? Specifically, how do you "care"? Do you voluntarily demostrate the courage of your convictions by charitably sharing your own resources with unemployed fellow citizens? Or perhaps you advocate the theft of the fruits of others labor? Or maybe you just pay lip service on an online comment board? How?

February 13 2011 at 4:45 PM Report abuse rate up rate down Reply
riciad

The unemployed who have reached the 99 weeks limit are no longer receiving benefits and are no longer in the system. They ARE still UNEMPLOYED! Whether you choose to recognize this or not doesn't change that fact. These people are even more desperately in need of assistance now than they were before. Like a lone voice in the wilderness!

February 11 2011 at 5:50 PM Report abuse +2 rate up rate down Reply
3 replies to riciad's comment