Consumer Confidence Index retreats

Dana Peterson

A measure of consumer confidence decreased as uncertainty increased over the economy and business and labor conditions.

The Conference Board reported its Consumer Confidence Index declined to 106.7 in February, down from a revised 110.9 in January. The drop interrupted what had been a three-month rise. The New York think tank bases the index on the results of monthly surveys of United States households.

Dana Peterson, chief economist of the Conference Board, said the latest reading reflected uncertainty. “While overall inflation remained the main preoccupation of consumers, they are now a bit less concerned about food and gas prices, which have eased in recent months. But they are more concerned about the labor market situation and the U.S. political environment.”

The expected average rate for 12-month inflation retreated to 5.2 percent in February, the lowest level in nearly four years. But plans to purchase automobiles, homes and major appliances dipped as consumers expected higher interest rates.

For February, less upbeat assessments of current conditions pulled down the present situation component of the index 7.7 points to 147.2.

The portion of consumers responding to the survey upon which the February index was based who called business conditions good edged down a tenth of a point to 21.2 percent. The share of those who said conditions were bad rose 1.8 points to 17.1 percent.

The portion of consumers who said jobs were plentiful fell 1.4 points to 41.3 percent. The share of those who said jobs were hard to get rose 2.5 points to 13.5 percent.

Less optimistic outlooks for the next six months pulled down the expectations component of the index 1.7 points to 79.8. Readings below 80 often signal a recession ahead.

The share of consumers who said they expect business conditions to improve over the next six months fell 1.9 points to 14.8 percent. The portion of those who anticipated worsening conditions also fell, though, a half point to 15.5 percent.

The share of consumers who said they expected more jobs to become available fell nine-tenths of a point to 14.7 percent. The portion of those who expected fewer jobs rose six-tenths of a point to 17.3 percent.

While 16.9 percent of consumers responding to the survey said they expected their incomes to increase, 11.3 percent expected a decrease.