The consumer sentiment index ends February at 67.0, sizably up from the mid-month flash of 66.4 and compared with January's 64.9. Splitting the difference between the mid-month gain with the gain in the final reading points to a roughly 68 rate for the last two weeks of this month. This is the best level since just before the war a year ago.

Inflation expectations (a separate but key part of this report) are favorable. Though the year-ahead rate is up 2 tenths to 4.1 percent, this is down a tenth from mid-month and down nearly a full percentage point from late last year. And the 5-year outlook, a long-term indicator of how well inflation expectations are anchored, is rock stable at a favorable 2.9 percent.

Looking at the components of the headline index, February's gain is evenly divided between the assessment of current conditions, up 2.3 points to 70.7, and the assessment of future conditions, up 2.0 points to 64.7. This balance is yet another positive in this report.

These results will lift expectations for next Tuesday's consumer confidence report from the Conference Board and leave Econoday's Consensus Divergence Index at 25, a level consistent with tangible outperformance relative to expectations for the US economy, a trend evident all year and pointing to no interruption in the Federal Reserve's rate-hike path.

Consumer sentiment is expected to end February at 66.4, 1.5 points above January and unchanged from February's mid-month flash.

The University of Michigan's Consumer Survey Center questions households each month on their assessment of current conditions and expectations of future conditions. Preliminary estimates for a month are released at mid-month and are based on about 420 respondents. Final estimates are released near the end of the month and are based on about 600 respondents.

The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer sentiment index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.

Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.