Consumer Confidence Increased in February Across the Country, Including in Texas
Consumer confidence increased across 45 states in February, indicating that the speed of vaccinations and the strength of the economic recovery are boosting confidence across the country.
Despite the energy crisis in the middle of the month, consumers in Texas consistently grew more optimistic in the economy over the course of February.
Due to widespread increases in confidence, trends in confidence converged in February to a degree not seen since prior to the onset of the pandemic.
Confidence improved across the country in February, with Morning Consult’s Index of Consumer Sentiment rising across 45 of 50 states. The only five states to record a decrease in confidence in February were Nebraska, Maine, Oklahoma, North Dakota and Arkansas, all of which decreased by 1 percent or less.
February marks an improvement over January, when consumer confidence increased in 37 of 50 states. The geographic scope of the recovery in confidence speaks to how broadly Americans are experiencing improving economic conditions and accelerating vaccine distributions.
February’s widespread increases in confidence across the country mark a dramatic reversal of the trend over the past year, when American consumers’ responses to economic news and developments were increasingly a function of where they live. Consumers across state lines responded in February more similarly than they have at any point since the onset of the pandemic.
Despite the severe winter storm and human tragedy in Texas, consumer confidence moderately improved in the Lone Star State in February. The Index of Consumer Sentiment increased 2.3 percent from Jan. 31 to Feb. 28. While the ICS decreased on Feb. 12 in the immediate aftermath of the storm, it quickly resumed its longer-term upward trend.
On March 2, Texas Gov. Greg Abbott, a Republican, lifted the state’s mask mandate and increased the capacity of all businesses to 100 percent. This change in policy may impact consumer confidence in March, but the increase in confidence clearly predates the change in policy.
Going forward, it remains to be seen whether or not consumers across state lines will continue to react as similarly as they did in February, particularly if the economic recovery or vaccine distribution slows. Changes in states’ pandemic policies and restrictions such as those announced by Abbott may drive consumers in different states to respond more differently in the coming months. However, for now, countrywide macroeconomic conditions and pandemic developments are the dominant drivers of consumer confidence.
John Leer leads Morning Consult’s global economic research, overseeing the company’s economic data collection, validation and analysis. He is an authority on the effects of consumer preferences, expectations and experiences on purchasing patterns, prices and employment.
John continues to advance scholarship in the field of economics, recently partnering with researchers at the Federal Reserve Bank of Cleveland to design a new approach to measuring consumers’ inflation expectations.
This novel approach, now known as the Indirect Consumer Inflation Expectations measure, leverages Morning Consult’s high-frequency survey data to capture unique insights into consumers’ expectations for future inflation.
Prior to Morning Consult, John worked for Promontory Financial Group, offering strategic solutions to financial services firms on matters including credit risk modeling and management, corporate governance, and compliance risk management.
He earned a bachelor’s degree in economics and philosophy with honors from Georgetown University and a master’s degree in economics and management studies (MEMS) from Humboldt University in Berlin.
His analysis has been cited in The New York Times, The Wall Street Journal, Reuters, The Washington Post, The Economist and more.