U.S. consumer confidence picked up much more strongly than expected in February as Americans shrugged off earlier worries over fiscal policy and tax increases, a private sector report showed on Tuesday.
The Conference Board, an industry group, said its index of consumer attitudes accelerated to 69.6, from a downwardly revised 58.4 in January, handily topping economists’ expectations for 61. It was the highest level since November.
January was originally reported as 58.6, the lowest level in more than a year.
Consumers last month had been concerned over the impact of Washington’s deal on the “fiscal cliff” at the beginning of the year. While the full brunt of tax increases and spending cuts that were scheduled to go into effect was averted, the payroll tax deduction holiday came to an end and weighed on consumer attitudes in January.
“The shock effect caused by the fiscal cliff uncertainty and payroll tax cuts appears to have abated,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.
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