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Conference Board Consumer Confidence Index declines in February

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Conference Board Consumer Confidence Index declines in February

Worries about business conditions and personal finances drag down optimism.

The Conference Board Consumer Confidence Index, which had increased moderately in January, declined sharply in February, falling 5.7% during the month. The Present Situation Index also declined, falling 3.9%, while the Expectations Index decreased 7.5% in February.

"Consumer confidence decreased in February, after posting a modest gain in January," said Lynn Franco, Director of Economic Indicators at The Conference Board. "Consumers' assessment of current conditions weakened, primarily due to a less favorable assessment of business conditions. Consumers' short-term outlook grew more pessimistic, with consumers expressing greater apprehension about business conditions, their personal financial situation, and to a lesser degree, labor market prospects. Continued turmoil in the financial markets may be rattling consumers, but their assessment of current conditions suggests the economy will continue to expand at a moderate pace in the near-term."

"Continued turmoil in the financial markets may be rattling consumers."

Consumers' assessment of present-day conditions declined in February. The percentage saying business conditions were "good" decreased from 27.7% to 26.0%. Those saying business conditions are "bad" increased from 18.8% to 19.8%. Consumers' appraisal of the labor market was also less positive. Those claiming jobs are "plentiful" decreased from 23.0% to 22.1%, while those claiming jobs are "hard to get" rose to 24.2% from 23.6%.

Consumers were more pessimistic about the short-term outlook than in January. The percentage of consumers expecting business conditions to improve over the next six months declined from 15.9% to 14.6%, while those expecting business conditions to worsen increased from 10.7% to 12.0%. Consumers' outlook for the labor market was less optimistic. Those anticipating more jobs in the months ahead decreased from 13.4% to 12.2%, while those anticipating fewer jobs increased slightly from 17.0% to 17.2%. The proportion of consumers expecting their incomes to increase declined from 18.6% to 17.2%, while the proportion expecting a reduction in income increased from 10.7% to 12.5%.

 

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