American consumers are the most confident they’ve been since 2000.
The Conference Board says its consumer confidence index rose to 130.8 in February, highest since November 2000 and up from 124.3 in January.
The business research group’s index measures consumers’ assessment of current conditions and their outlook for the next six months. They feel better about today’s economy than they have since March 2001. Their outlook also improved.
Tax cuts passed into law last year are starting to show up in workers’ paychecks. “As people slowly absorb the details of the tax reform package, opinion polls suggest that it is becoming significantly more popular,” Stephen Stanley, chief economist at Amherst Pierpont Securities, wrote in a research note.
A strong job market is also boosting confidence. The unemployment rate has stayed at a 17-year low 4.1 percent.
Consumers shrugged off volatility in the stock market.
“Overall, consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead,” says Lynn Franco, the Conference Board’s director of economic indicators.
Economists watch the Conference Board report closely because consumer spending accounts for about 70 percent of U.S. economic output.
The overall index hit bottom at 25.3 in February 2009 at the depths of the Great Recession before rebounding as the U.S. economy recovered.