Consumer Sentiment Ends February Well Above January Level

Consumer sentiment, at 99.7, ended February roughly at the mid-month reading and well above January's 95.7. The tax cut appears to be the driver of the optimism and was quantified in yesterday's personal income & outlays report where personal taxes fell 3.3 percent in data for January.

The two components in today's report show similar gains: current conditions up 4.4 points to 114.9 which hints at improvement for February consumer spending; and expectations up 3.7 points to 90.0 to underscore the consumer's confidence in the outlooks for jobs and income.

Readings on inflation expectations, in contrast to inflationary concerns in the financial markets, show no pressure whatsoever, unchanged for a third straight month at 2.7 percent for the 1-year outlook and unchanged for a second straight month at 2.5 percent for the 5-year outlook.

Consumer confidence remains a standout feature of the economic data, in contrast to actual consumer spending which has been more moderate than robust.