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Consumer confidence falls

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However, confidence remains at pre-recession levels.

The Conference Board Consumer Confidence Index, which had increased in January, declined by 7.7% in February.

"Despite this month's decline, consumers remain confident that the economy will continue to expand at the current pace in the months ahead."

According to Lynn Franco, Director of Economic Indicators at The Conference Board: "After a large gain in January, consumer confidence retreated in February, but still remains at pre-recession levels. Consumers' assessment of current conditions remained positive, but short-term expectations declined.

“While the number of consumers expecting conditions to deteriorate was virtually unchanged, fewer consumers expect conditions to improve, prompting a less upbeat outlook. Despite this month's decline, consumers remain confident that the economy will continue to expand at the current pace in the months ahead."

Consumers' appraisal of current conditions was moderately less favorable in February than in January. Those saying business conditions are "good" decreased from 28.2% to 26.0%, however those claiming business conditions are "bad" decreased from 17.3% to 17.0%. Consumers were also somewhat less positive in their assessment of the job market, with the proportion stating jobs are "plentiful" decreasing slightly from 20.7% to 20.5%, and those claiming jobs are "hard to get" increasing from 24.6% to 26.2%.

Consumers' optimism about the short-term outlook was considerably less positive in February. Those expecting business conditions to improve over the next six months decreased from 18.9% to 16.1%, while those expecting business conditions to worsen increased from 8.2% to 8.7%.

Consumers' outlook for the labor market was also less optimistic. Those anticipating more jobs in the months ahead decreased from 17.3% to 13.4%. However, those anticipating fewer jobs declined from 14.8% to 14.3%. The proportion of consumers expecting growth in their incomes declined from 19.5% to 15.1%. The proportion expecting a decrease rose from 10.8% to 12.0%.

 

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