Consumer confidence in the US fell for the second consecutive month in February, The Conference Board reported today. The Consumer Confidence Index now stands at 102.9 (1985=100), down from the downwardly revised reading of 106.0 in January.
“Consumer confidence declined again in February. The decrease reflected large drops in confidence for households aged 35 to 54 and for households earning $35,000 or more,” said Ataman Ozyildirim, senior director of economics at The Conference Board.
“While consumers’ view of current business conditions worsened in February, the Present Situation Index still ticked up slightly based on a more favorable view of the availability of jobs. In fact, the proportion of consumers saying jobs are ‘plentiful’ climbed to 52.0% — back to levels seen in the spring of last year. However, the outlook appears considerably more pessimistic when looking ahead. Expectations for where jobs, incomes and business conditions are headed over the next six months all fell sharply in February.”
The Present Situation Index — based on consumers’ assessment of current business and labor market conditions
— increased to 152.8 (1985=100) in February from 151.1 in January.
However, the Expectations Index — based on consumers’ short-term outlook for income, business and labor market conditions — declined to 69.7 (1985=100) from a downwardly revised 76.0 reported in January.
The Conference Board noted the Expectations Index has now fallen below a reading of 80, which suggests a recession within the next year.
Ozyildirim noted while the 12-month inflation expectations improved to 6.3% from 6.7% in January, consumers may already be showing early signs of cutting back on spending due to high prices and rising interest rates.
“Fewer consumers are planning to purchase homes or autos, and they also appear to be scaling back plans to buy major appliances. Vacation intentions also declined in February.”
Consumers’ appraisal of the labor market was favorable, as 52.0% of consumers said jobs were plentiful, up from 48.1% in January. Conversely, 10.5% of consumers said jobs were hard to get, down from January’s 11.1%.
However, consumers were less upbeat about the short-term labor market outlook. While 14.5% of consumers expect more jobs to be available, 20.3% anticipate fewer jobs.