Instant View: Consumer sentiment improves in February
NEW YORK (Reuters) - The Thomson Reuters/University of Michigan's preliminary reading on the overall index of consumer sentiment rose to 76.3 from 73.8 in January, topping economists' forecasts of 74.8.
The barometer of current economic conditions rose to 88 from 85, while the gauge of consumer expectations rose to 68.7 from 66.6.
Households with incomes below $75,000 were among the most optimistic, "with expected gains in employment more than offsetting declines in after-tax incomes due to the end of the payroll tax cut," survey director Richard Curtin said in a statement.
U.S. employment grew modestly in January and job gains for the prior two months were larger than first reported.
CARY LEAHEY, SENIOR ADVISOR, DECISION ECONOMICS, NEW YORK:
"However, families' perceptions of current conditions are not really the problem. But expectations further out remain subdued at 68.7, 10 points below the recent highs in October. Households are obviously worried about the impact of the upcoming sequester (budget cuts) and many are hard-hit by the recent increases in tax rates, most notably the termination of the 2 percent payroll tax credit in December."
THOMAS SIMONS, MONEY MARKET ECONOMIST, JEFFERIES & CO., NEW YORK:
"The reading was a nice surprise. Consumers are getting over the fact that their paychecks are a little smaller since the beginning of the year due to the sunset of the payroll tax holiday. This offers some encouragement that consumption will recover following a weak month in January."
ERIC STEIN, VICE PRESIDENT AND PORTFOLIO MANAGER, EATON VANCE INVESTMENT MANAGERS, BOSTON:
"The number was certainly stronger than expected and consistent with a U.S. economy that continues to grow and to make progress. Still, the recovery is not booming by any stretch of the imagination."
BRIAN KIM, CURRENCY STRATEGIST, RBS SECURITIES, STAMFORD, CONNECTICUT:
"It was a positive report despite what we have seen of late such as rising gasoline prices and the uptick in unemployment. This bodes well for consumer spending overall and goes to show that along with the other near-term releases on the economy that the U.S. consumer has not fallen off the cliff."
JIM AWAD, MANAGING DIRECTOR AT ZEPHYR MANAGEMENT IN NEW YORK:
"This is unexpected given the increase in gas prices and payroll taxes. It reflects the recovery in housing prices and the stock market. This is a welcome event and it should be embraced by the market."
IAN LYNGEN, SENIOR GOVERNMENT BOND STRATEGIST, CRT CAPITAL GROUP, STAMFORD, CONNECTICUT:
"Overall, a better than expected report that has on the margin done little more than offer confirmation to the softer (Treasuries) price action."
MICHAEL WOOLFOLK, SENIOR CURRENCY STRATEGIST, BNY MELLON, NEW YORK:
"Consumer confidence is the most important release of the morning and trumps what we saw with industrial production. It's a good report. The consumer is going to be very important to the recovery this year and the fact that we got that return of confidence so soon after the increase in the payroll tax is a positive sign. The stock market has a lot to do with the degree of confidence out there. We'll be watching retail sales and consumer spending going forward."
MARKETS: BONDS: U.S. Treasuries yields rose to session highs. Benchmark 10-year notes were last down 6/32 in price to yield 2.03 percent, up from around 2.01 percent before the data.
DOLLAR: The dollar extended gains against the Japanese yen and pared gains versus the euro
STOCKS: The stock market held gains. The Down Jones industrial average is slightly up 28 points trading around 14,000 points.
(Americas Economics and Markets Desk; +1-646 223-6300)
- Exclusive: Secret contract tied NSA and security industry pioneer |
- Housing, jobs data weaken, but overall economic picture still upbeat
- Putin critic Khodorkovsky in Germany after pardon |
- Target probe looks overseas, stolen cards offered online
- Pizza outlet attacked as India, U.S. fail to cool diplomat row |