RTT News reported that reflecting a notable improvement in consumer expectations, the Conference Board released a report showing that its consumer confidence index for the month of February jumped to its highest level in three years.

The Conference Board said that its consumer confidence index surged up to 70.4 in February from a revised 64.8 in January. Economists had been expecting the index to rise to a reading of 65.0 from the 60.6 originally reported for the previous month. With the substantial monthly increase, the consumer confidence index rose to its highest level since coming in at 76.4 in February of 2008.

The sharp increase by the index reflected growing optimism about the short term future, with the expectations index rising to 95.1 in February from 87.3 in January 2011. Consumers expecting business conditions to improve over the next six months rose to 24.4% from 24%, while those expecting conditions to worsen fell to 10.4% from 12.2%.

Meanwhile, the assessment of the outlook for the labor market was mixed, as consumers expecting more jobs in the months ahead slipped to 19.8% from 20.8% and those anticipating fewer jobs decreased to 15.4% from 21.2%.

Mr James Knightley, an economist at ING Financial, said that "The expectations component rose to its highest level since December 2006, which is really positive news given it is now at levels historically consistent with 3% real spending growth. However, inflation expectations are also starting to rise, which casts some doubt on the Fed's assertion that deflation remains a threat for the US economy."

The report also showed that the present situation index improved to 33.4 in February from 31.1 in January, as consumers saying business conditions are good rose to 12.4% from 11.3% and those saying conditions are bad was unchanged at 39.6%.

The Conference Board said consumers' assessment of the labor market was also more positive, with those saying jobs are plentiful rising to 4.9% from 4.6% and those stating jobs are hard to get falling to 45.7% from 47%.

Ms Lynn Franco director of the Conference Board Consumer Research Center said that "Consumers' assessment of current business and labor market conditions has improved moderately, but still remains rather weak. Looking ahead, consumers are more positive about the economy and their income prospects, but feel somewhat mixed about employment conditions."

(Sourced from www.rttnews.com)