- Associated Press - Tuesday, February 22, 2011

NEW YORK (AP) — The Consumer Confidence Index rose in February to its highest point in three years as Americans are feeling more optimistic about their income prospects and the direction the economy is headed.

The Conference Board says its Consumer Confidence Index climbed to 70.4 this month, up from a revised 64.8 in January, hitting its highest level since February 2008. It was the index’s fifth consecutive monthly increase. The figure topped economists’ expectations of a reading of 65, according to FactSet.

While confidence is rising, it is still well below the 90-plus readings that signal a stable economy. Confidence fell off a cliff after the U.S. housing bubble burst and the financial crisis took hold in 2007.

Consumer confidence fell below 90 in January 2008 and hit an all-time low of 25.3 a year later. While confidence and spending have been inching back up as business conditions improve, Americans are still feeling cautious, especially when it comes to the job market.

Unemployment fell 0.4 percent in January after dropping the same amount in December, but the rate remains at 9 percent, a historically high level. That may be one reason consumers’ assessment of present-day business and employment conditions improved only moderately in February.

Those saying jobs are “plentiful” increased to 4.9 percent from 4.6 percent in January, while those stating that business conditions are “good” rose to 12.4 percent from 11.3 percent.

While this assessment of current business conditions “remains rather weak,” the index is at a three-year high because of “growing optimism about the short-term future,” says Lynn Franco, director of the Conference Board Consumer Research Center.

Consumers’ short-term outlook has improved since January. The share of respondents who expected business conditions to improve over the next six months increased to 24.4 percent from 24.0 percent, while the number that expected business conditions to worsen declined.


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