The numbers: Americans grew more confident in the economy in February after the government stepped up stimulus payments to families and coronavirus cases fell sharply, but they were still worried about how long the pandemic will linger.
The index of consumer confidence rose to a three-month high of 91.3 in February from a revised 88.9 in January, the Conference Board said Tuesday.
Economists polled by Dow Jones and The Wall Street Journal had forecast a small increase to 91.0.
Consumer confidence is still far below pre-pandemic levels, however. The index stood at 132.6 before the viral outbreak last year.
What happened: An index that tracks how consumers feel about the economy right now rose for the first time in four months — to 92 from 88.5.
The government sent out $600 stimulus payments to most families in January and increased unemployment benefits for millions of jobless Americans. At the same, time the record increase in coronavirus cases at the end of last year began to subside, adding to a more positive tenor for the economy.
“This course reversal suggests economic growth has not slowed further,” said Lynn Franco, senior director of economic indicators at the nonprofit board.
Yet another gauge that assesses how Americans view the next six months —the so-called future expectations index — slipped to 90.8 from 91.2. That reflects ongoing uncertainty about the path of the virus even as more and more Americans get vaccinated.
One positive sign: The number of people planning vacations increased again, especially for those who intend to fly or travel outside the U.S.
Other measures of confidence, including the consumer-sentiment survey and daily report by Morning Consult, have also been moving higher. The Morning Consult poll is part of the MarketWatch Coronavirus Recovery Tracker
The big picture: The economy is on the mend again after a coronavirus-induced soft patch at the end of last year. Yet the pace of growth will be dictated by how quickly the vaccines are administered and the virus begins to fade. For now the answers are still unclear.
What they are saying? “Look for consumers to become increasingly confident in coming months, as the economy reopens and the vaccines are distributed. Warmer weather won’t hurt, either,” said senior economist Jennifer Lee of BMO Capital Markets.
Investors sifted through the latest comments from Federal Reserve Chairman Jerome Powell during testimony before the U.S. Senate. Powell repeated his view that inflation is likely to remain mild and the economy should improve throughout the year.
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