A monthly measure of consumer confidence has declined as concerns mount over current business and labor conditions as well as the prospects for the near future. Economic growth is expected to continue nonetheless.
The Conference Board reported that its Consumer Confidence Index retreated 5.6 points to 92.2 in February.
“Consumers’ assessments 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,” said Lynn Franco, director of economic indicators for the Conference Board. “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.”
The business research and membership group bases the index on the results of monthly surveys of U.S. households. Economists closely monitor the results because consumer spending accounts for more than two-thirds of all economic activity in the country.
For February, assessments of current business and labor conditions pulled down the present situation component of the index 4.5 points to 112.1.
The proportion of consumers responding to the survey upon which the February Consumer Confidence Index was based who described business conditions as “good” fell 1.7 points to 26 percent. The share of those who characterized business conditions as “bad” rose a point to 19.8 percent.
The proportion of consumers who said jobs are “plentiful” fell nine-tenths of a point to 22.1 percent. Those who said jobs are “hard to get” increased six-tenths of a point to 24.2 percent.
Consumers also were less optimistic in their short-term outlook, bringing down the expectations component of the index 6.4 points to 78.9.
The share of consumers who expect business conditions to improve over the next six months fell 1.3 points to 14.6 percent. The proportion of those anticipating worsening conditions rose 1.3 points to 12 percent.
The share of consumers who expect more jobs to become available in coming months dropped 1.1 points to 12.2 percent. The proportion of those anticipating fewer jobs edged up two-tenths of a point to 17.2 percent.
While 17.2 percent of consumers said they expect their incomes to increase, down 1.4 points, 12.5 percent of consumers anticipate lower incomes, up 1.8 points.