February 24, 2026
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The Conference Board reported that consumer confidence roe 2.2 points in February to91.2 after having declined 5.2 points in Janauay. Consumer confidence reached a peak in November of 2024 at 112.8 but fell steadily last year and remains close to its lowest point during the 2929 recession.
Senior Economist at the Conference Board, Dana Peterson, said, “Confidence ticked up in February after falling in January, as consumers’ pessimistic expectations for the future eased somewhatFour of five components of the Index firmed. Nonetheless, the measure remained well below the four-year peak achieved in November 2024 (112.8).”
We have a hard time getting as pessimistic as what this index has been indicating. The stock market is at a record high level. The economy keeps cranking out a small number of new jobs although the pace of job creation has slowed down. AI is boosting growth in the investment spending component of GDP. We saw GDP gsrowth of 1.4% in the fourth quarter but we expect GDP growth of 3.0% in 2026.
Given the magnitude of the earlier declines in confidence earlier this year one might have expected a sharp pullback in consumer spending. But that has not happened. Instead, real consumer spending has risen 1.7% in the past year. With real disposable income rising 0.9%, we expect consumer spending to climb by 1.7% in 2026.
The reason why spending has not pulled back this time is presumably because of the impressive increase in household net worth. Drive by the rapid increase in stock prices and a 50% increase in home prices in the past five years, consumer net worth has risen rapidly to a record high level. This provides a psychological boost to middle and upper income families who own stocks and bonds. Lower income families are struggling and cutting back on spending where they can.
Confidence data reported by the Conference Board are roughly matched by the University of Michigan’s series on consumer sentiment. As shown in the chart below, trends in the two series are identical but there can be month-to-month deviations.
Stephen Slifer
NumberNomics
Charleston, SC
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