Consumer confidence ticks up in February as labor market outlook improves

Consumer confidence saw a slight increase in February, according to a recent survey by the Conference Board. The consumer confidence index rose by 2.2 points to reach 91.2, indicating a more optimistic view of the economy compared to the previous month. Despite this improvement, the index remains below the peak reached in November 2024.

One of the key factors contributing to the rise in consumer confidence is the improving job market. A higher percentage of survey respondents now believe that jobs are “plentiful” rather than “hard to get,” suggesting a more positive outlook on employment opportunities. This sentiment is supported by recent data from the Bureau of Labor Statistics, which showed strong hiring numbers in January. Although the economy only added 181,000 jobs in 2025, a significant decrease from the previous year, the increase in hiring last month has contributed to consumers’ confidence in the labor market.

In addition to the job market, consumers’ short-term expectations for income, business conditions, and the overall job market have also improved. However, these expectations remain below 80, a threshold that can indicate a looming recession. It is worth noting that this is the 13th consecutive month that these readings have fallen below 80. On the other hand, consumers’ assessments of their current economic situation declined slightly in February, dropping by 1.8 points to 120.

Despite the overall increase in consumer confidence, Americans are still concerned about rising costs and inflation. Dana Peterson, chief economist for the Conference Board, highlighted that write-in responses showed growing pessimism towards prices, inflation, and the cost of goods. While consumers’ 12-month inflation expectations remain elevated, their plans to purchase big-ticket items in the next six months have risen. This includes items like used cars, furniture, TVs, and smartphones.

Home-buying expectations remained relatively stable in February, although the housing market has been experiencing a sluggish period for several years. The survey also noted an increase in mentions of trade and politics, as well as a decrease in references to labor market conditions, reflecting consumers’ changing perceptions of the economic landscape.

Overall, the latest consumer confidence data paints a mixed picture of the economy, with improvements in the job market and short-term expectations offset by concerns about inflation and rising costs. Despite these challenges, consumers are showing a willingness to make significant purchases in the coming months, which could help boost economic growth in the near future.