Consumers put on a happier face

New economic reports reflect both the weather-dampened economy of the past few months and brighter days ahead.

While gains in home prices slowed and new-home sales dipped in January and February, Americans' confidence in the economy and labor market this month surged to the highest level in six years, the Conference Board said Tuesday. Its consumer confidence index rose from 78.3 in February to 82.3, highest since January 2008.

In a research note, Capital Economics cited weather that improved from the cold and snowy conditions of the previous months, as well as near-record-high stock prices and a strengthening labor market.

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"This seems to fit with the idea that weather was largely responsible for the weakness," says Capital Economics' Paul Ashworth. He noted that New England, hit hard by frigid temperatures and snowstorms over the winter, posted one of the index's strongest gains.

The rise in the overall index was due to a big jump in a measure of consumers' expectations for the economy to 83.5 from 76.5. Ashworth says that reading typically points to annualized growth in consumer spending of 2.6%, compared with 2% in 2013.

A separate measure of consumers' attitudes about the current economy slipped to 80.4 from 81.0. The share of consumers who said jobs are plentiful dipped to 13.1% from 13.4%, while the portion of those who said jobs are hard to get rose to 33% from 32.4%.

Still, the "present situation" index remains near February's post-recession high and has shown steady improvement, says Barclays Capital economist Cooper Howes. While the expectations measure is volatile, the gauge of the current economy more reliably captures consumers' views over time, he says.

"It's reflective of the fact that more people are starting to realize that the improvement in the economy" is affecting them through higher home and stock pri! ces, as well as stronger job growth over the long term.

Separately, new-home sales fell 3.3% last month, the Census Bureau said, in another sign that the housing market weakened amid extreme winter weather. Yet other forces may also be holding down new-home sales, including mortgage rates that have drifted higher since last summer and an unusually low inventory of new homes that has pushed up prices.

IHS Global Insight said it expects inventories to grow this year, making homes more affordable to more buyers.

A closely watched measure of home prices in 20 cities rose 0.8% in January, but the gains slowed from previous months, according to the Standard & Poor's/Case-Shiller index.