The House’s failure Friday to pass the American Health Care Act might have left investors shaken, but Tuesday brought a rebound.
The Conference Board announced that the Consumer Confidence Index has reached a high of 125.6 — a number the U.S. hasn’t seen since 2000. This follows a significant stock market spike triggered by last November’s election, in which The Dow Jones and Nasdaq rose 12 percent.
This renewed sense of optimism in the economy could have many businesses seeing green. Not only did the percentage of people who considered business conditions to be “good” increase from 28.2 to 32.2 percent, attitudes about the labor market improved as well. Only 20.3 percent of people considered jobs “hard to get” — an eight-year low that reflects the shrinking unemployment rate, which now sits below five percent.
A healthy labor market with active consumers bodes well for the economy. As Lynn Franco, director of economic indicators at The Conference Board, put it, “Renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months.” The state of the housing market supports her suggestion, with home prices increasing nearly six percent in January, the highest in 31 months.
Just like it did in November, the stock market reacted to the Consumer Confidence news with sizeable gains. CNBC reported that U.S. equities rose in response to The Conference Board’s data, with The Dow industrial average gaining 100 points. According to CNBC, this type of surge should mean gains for retail stocks over the next week and month.