Consumer confidence jumped in February on job market improvement

WASHINGTON -- Consumer confidence surged in February as the improving job market offset concerns about higher taxes and looming federal spending cuts, according to a leading private barometer.

The monthly consumer sentiment index from Thomson Reuters and the University of Michigan rose 5.1% last month from January. The new reading of 77.6 also was up 3.1% from a year earlier.

“Consumer confidence continued to improve in February due to expected gains in employment,� said Richard Curtin, the survey’s chief economist. “These expected job gains have partially offset concerns about higher payroll taxes and the impending reduction in federal spending.�

Although the unemployment rate ticked up to 7.9% in January, the economy added 157,000 new jobs and figures for the last three months of 2012 were revised sharply upward. Weekly jobless claims have been trending down.

But Curtin warned the pending federal budget cuts could reduce consumer demand and make it harder for the economy to continue adding new jobs.

QUIZ: How much do you know about looming federal budget cuts?

President Obama and congressional Republicans remained at odds on deficit reduction as $85 billion in automatic federal spending cuts this year were set to kick in late Friday.

Consumers’ confidence in Washington remained near an all-time low in the survey, with just 15% of respondents saying the Obama administration and Congress were doing a good job.

“Consumers find the political blame-game for policy inaction a very unsatisfactory substitute for a compromise that could improve economic conditions in the near term as well as over the longer term,� Curtin said.

ALSO:

Eurozone unemployment hits record high

Bipartisan agreement on budget cuts: Scalpel is better than ax

Consumer spending rose slightly in January even as income tumbled