US: Mixed confidence data cloud outlook – TD Securities

TD Securities’ Global Strategy Team notes that US consumer confidence data surprised to the upside in February, mainly due to upward revisions to January. The present situation index weakened, while expectations improved, leaving the overall tone mixed. The analysts highlight a “low-fire, low-hire” labor market theme and see consumption plans on uncertain ground for US households.

Mixed confidence and labor market signals

"Consumer confidence surprised to the upside in February, rising to 91.2 from 89.0 previously (TD: 85.5, consensus: 87.1). The upside surprise, however, was concentrated in backward revisions to January, which was revised up to 89.0 from 84.5 previously."

"We were expecting a modest rebound in Feb after a decline in Jan, and that is essentially what occurred. The move is not as positive as the headline surprise would suggest. In fact, the present situation index declined 1.8pts in Feb after an 8.1pt upward revision in Jan."

"Expectations moved higher and was the source of the rebound. Consumption plans in the report saw a mix of positive and negative, reflecting uncertain ground for consumers."

"Consumer's labor market assessment improved somewhat with the labor differential ticking up to 7.4 after January was revised up 3.7pts to 6.8. Job finding expectations have been on a general downtrend, with the NY Fed survey corroborating."

"The low-fire, low-hire labor market is still the main theme, despite recent stabilization."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)