A monthly measure of consumer confidence has dropped on less upbeat readings for business and labor conditions, but also reflects expectations the United States economy will continue to grow.
The Conference Board reported that its Consumer Confidence Index retreated more than seven points to 96.4 in February. The drop nearly erased a gain in January that had carried the index to its highest level since August 2007. February readings declined for assessments of current conditions as well as the short-term outlook.
“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,” said Lynn Franco, director of economic indicators for the Conference Board. “Despite this month’s decline, consumers remain confident that the economy will continue to expand at the current pace in the months ahead.”
The Conference Board, a business research and membership group, bases the index on the results of monthly surveys of U.S. households. The index is closely monitored because consumer spending accounts for more than two-thirds of economic activity in the country.
Less optimistic assessments of current conditions pulled down the present situation component of the index nearly four points to 110.2 in February.
The share of consumers responding to the survey upon which the February index was based who described business conditions as “good” slipped more than two points to 26 percent. The proportion of those who called conditions “bad” edged down three-tenths of a point to 17 percent.
While 20.5 percent of consumers characterized jobs as “plentiful,” down two-tenths of a point, 26.2 percent of consumers said jobs are “hard to get,” up 1.6 points.
Consumers were less upbeat in their short-term outlook, pulling the expectations component of the index down nearly 10 points to 87.2.
The share of consumers who expect business conditions to improve over the next six months fell nearly three points to 16.1 percent. The proportion of those anticipating worsening conditions rose a half point to 8.7 percent.
While 13.4 percent of consumers believe more jobs will become available in coming months, down almost four points, 14.3 percent expect fewer job openings, down a half point.
The share of consumers expecting increasing income declined more than four points to 15.1 percent. The proportion of consumers expecting decreasing income rose more than a point to 12 percent.