NEW YORK (FNS) -- The Consumer Confidence Index rose 3.2 points in February compared with the previous month, but fell 6.2 points from last year when the index hit a 30-year high of 138.3.
According to the monthly index released by the Conference Board here, consumer confidence in February reached 132.1, up from January's index of 128.9. Low inflation and interest rates, increasing job security and a stable stock market continued to bolster the economy and consumer confidence.
Buoying last month's figures was the Present Situation Index, which measures consumer's immediate economic expectations. That index hit a record 178.4 in February, the highest number since the Conference Board began its consumer confidence survey 32 years ago. January's Present Situation Index was 172.9.
But testifying on Capitol Hill in his twice-annual monetary policy report to Congress, Federal Reserve Board Chairman Alan Greenspan indicated that some of that confidence may be misplaced. Greenspan voiced concern that "after eight years of expansion, the economy appears stretched in a number of dimensions."
Among the potential imbalances on Greenspan's list were soaring equity prices. A "downward correction to stock price," he said, would threaten the household consumption spending and business investment spending that has propelled growth at an above-average rate, topping 4% for three consecutive years.
The Consumer Confidence Survey indicated that consumers have not yet felt the pinch. Nearly half of people surveyed said jobs are "plentiful" while only 11.7% said jobs are "hard to get."
The Consumer Confidence Survey, conducted for the Conference Board by NFO Research Inc., is based on a representative sample of 5,000 U.S. households.
"All the things that make consumers confident are doing well. Consumers are confident given the other things like the stock market, employment, income, inflation and interest rates. Confidence is a confirmation that the consumer sees these things as very positive," said Ira Silver, chief economist with JCPenney Co., Plano, Texas.
However, the Expectations Index, which measures consumer confidence for the next six months, remains well below last spring's peak of 116.2. The Expectations Index this month is 101.2, up 1.6 points from January's index of 99.6.
"That is indicative of a situation where things are very, very good now. Most people find it difficult to believe that it will continue to be this good. It's almost inconceivable that the employment rate would go up even more or that the stock market would raise anymore," Silver said.
Consumer confidence has continued to climb since October 1998's slump of 119.3. Consumers labeling current business conditions as "good" rose to 43.1% in February from 39.8% in January, while households rating conditions as "bad" fell to 8.3%.
The proportion of consumers expecting business conditions to get better over the next six months held steady at 15.4%, while the employment outlook rose slightly, with 14% of consumers expecting jobs to become more plentiful between now and this summer.
