U.S. Consumer Confidence Declines in February
by:Tom Moeller
|in:Economy in Brief
Summary
- Expectations weaken again.
- Present situation index improves.
- Inflation expectations fall sharply.
The Conference Board's Index of Consumer Confidence Index fell 2.9% (-2.6% y/y) to 102.9 during February after declining 2.8% to 106.0 in January, revised from -1.7%. A reading of 108.5 had been expected in the Action Economics Forecast Survey for February.
The Expectations Index fell 8.3% (-13.7% y/y) to 69.7 following an 8.9% January drop, revised from -6.7%. The Present Situation Index rose 1.1% (6.9% y/y) to 152.8, the highest level in ten months.
Consumers' assessment of current business conditions deteriorated m/m as 17.8% of respondents characterized conditions as good, the least in three months. Labor market readings improved sharply this month. The jobs gap, representing the difference between respondents indicating that jobs are plentiful versus those saying jobs are hard to get, rose to 41.5% in February, the highest level since April of last year. Calculated by Haver Analytics, this series has a 67% correlation with the unemployment rate over the last ten years. The jobs plentiful measure rose to 52.0, up 7.2% in the last four months. The jobs hard-to-get measure fell to the lowest level since April of last year.
A lessened 14.2% of respondents felt that business conditions would get better in six months. Fifteen percent of respondents felt there would be more jobs in six months, the fewest since October 2016. A lessened 13.4% expected income to increase in six months, the least since August 2020.
The expected inflation rate in twelve months declined to 6.3% from 6.7% in January. It remained below the 7.9% high in June of last year but remained higher than the 4.4% low in January 2020.
Sixty-three percent of respondents felt that interest rates would be higher in twelve months while 11.5% thought they would be lower. Thirty-one percent of respondents thought that stock prices would be higher in twelve months and 31.6% thought they would be lower.
The share of respondents planning to buy a home within six months plunged to 5.0% in February from 6.3% in January, still higher than its 4.5% July low. Those planning to buy a major appliance weakened to 41.8% of respondents this month after surging to 52.4% in October. It remained above its 41.1% July low.
The Consumer Confidence data are available in Haver's CBDB database. The total indexes, which are indexed to 1985=100, appear in USECON, and market expectations are in AS1REPNA.
The Role of Immigration in U.S. Labor Market Tightness from the Federal Reserve Bank of San Francisco can be found here.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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