U.S. consumer confidence climbed to the highest level in more than 15 years, good news for the economy.
The Conference Board said on Tuesday that its consumer confidence index rose to 114.8 in February from 111.6 in January and the highest since July 2001.The index measures both consumers’ assessment of current conditions and their expectations for the future. Both improved in February.
“Overall, consumers expect the economy to continue expanding in the months ahead,” said Lynn Franco, director of economic indicators for the business group.
Americans have been in a sunny mood since the Nov. 8 election of Donald Trump ended a divisive presidential campaign and increased the odds of a tax cut and a repeal of President Barack Obama’s health care law. The stock market has also surged since the election. The Dow Jones industrial average closed Monday at a record high for the 12th straight time.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, noted that confidence among those younger than 35 actually fell in February.
“It’s not hard to see why younger people, who are less likely to own stocks, more likely to have voted (for Democratic candidate Hillary) Clinton, and are more likely to rely on Obamacare than older people, would be less confident,” he wrote in a research report.
Economists closely monitor consumers’ mood because their spending accounts for about 70 percent of U.S. economic activity. On Tuesday, the Commerce Department reported that the U.S. economy grew at a sluggish 1.9 percent annual pace from October through December. But consumer spending expanded at a healthy 3 percent annual rate.