The Conference Board's Consumer Confidence Index in February fell to its lowest point in five years, keeping the economy on recession watch as shoppers fretted over the job market.
The Index dropped to 75 from 87.3 in January. Its two components also declined in February. The Expectations Index decreased to 57.9 from 69.3, while the Present Situation Index dropped to 100.6 from 114.3 last month.
"The decline in consumer confidence, including the drop in consumers' assessment of the labor market, has a recession-like feel to it. While we do not think that consumer confidence drives spending, we believe that it can pick up major swings in economic activity and the cumulative decline in confidence keeps us on recession watch," said John Ryding, chief U.S. economist at Bear, Stearns & Co., in a research note.
Ryding said confidence is "much weaker than expected," citing the deterioration of consumers' assessment of labor market conditions as one reason for the sharp decline in February.
Lynn Franco, director of The Conference Board Consumer Research Center, said the overall Index continues to lose ground and, with the "exception of the Iraqi War in 2003, is now at its lowest level in nearly 15 years." In November 1993, the Index was at 71.9.
"The weakening in consumers' assessment of current conditions, fueled by a combination of less favorable business conditions and a sharp rise in the number of consumers saying jobs are hard to get, suggests that the pace of growth in early 2008 has slowed even further. Consumers' expectations have also deteriorated significantly and are now at a 17-year low (January 1991, 55.3). With so few consumers expecting conditions to turnaround in the months ahead, the outlook for the economy continues to worsen and the risk of a recession continues to increase," Franco said.
As for present conditions, consumers who claimed business conditions are "bad" rose slightly to 21.8 percent from 20.1 percent, and those who said business conditions are "good" dropped to 18.5 percent from 20.6 percent. Consumers were also more pessimistic about the job market, as those who said jobs are "hard to get" rose to 23.8 percent from 20.6 percent, while those who believed jobs are "plentiful" declined to 20.6 percent from 23.8 percent.
In the latest poll, short-term expectations also fell, as consumers who said business conditions will worsen over the next six months increased sharply to 21.4 percent from 16.3 percent. Respondents who anticipated business conditions to improve declined to 9.5 percent from 11.5 percent in January.
On the jobs front, the outlook over the next six months also was tinged with pessimism. Those surveyed who expected fewer jobs in the months ahead spike up to 27.9 percent from last month's 21.9 percent, while the respondents who said they expect more jobs fell to 9 percent from 10.5 percent. Moreover, the consumers who said they expect their incomes to rise fell to 17 percent from 18.1 percent.
Assouline is paying homage to the late Azzedine Alaïa with a reprint of "Alaïa Livre de Collection.” The book is comprised of photographs of the designer's summer 1992 runway show with models Christy Turlington Burns, Naomi Campbell and Tyra Banks, pictured here at right. #wwdfashion #alaia #tyrabanks
Fall 2018 accessories take on a painterly hue, with Nebulas Blue among Pantone’s top 10 colors of the season. (📸: @jonghyupstudio ; editor: @twallz21 ; stylist and set designer: @haideefindlaylevin ) #wwdaccessories
@americanapparelusa is relaunching the brand outside of the U.S. today, opening its online store to more than 200 countries. The company is also contemplating a return to brick-and-mortar, though details have not been confirmed. In tandem with the expanded distribution is a recasting of a social media ad campagn, called “Back to Basics,” pictured here, with a focus on diversity and a cast of models above the age of 21. Read more on WWD.com #wwdnews #wwdfashion
Exclusive: @britneyspears is continuing to expand her brand. The pop icon, who appears in @kenzo ’s latest campaign, is partnering with Epic Rights to launch a line of branded merchandise. Read @hernameislex ‘s story, link in bio. #wwdnews #britneyspears
The Duchess of Cambridge channeled Princess Diana’s look upon giving birth to Prince Harry, when she and the Duke of Cambridge departed the hospital with the new baby Prince this afternoon in London. #wwdeye #princeofcambridge
The new Prince of Cambridge has arrived! The Duke and Duchess of Cambridge posed with the 8-pound newborn. She wore a look from one of her go-to designers, @jennypackham. Tap link in bio for more. #wwdeye #princeofcambridge
Jewelry label @alisonlou has made a name for itself with fine jewelry that speaks to the Millennial market. Now @twallz21 reports that the label is bringing those playful ideas to a new affordable line of lucite hoops with the launch of Loucite by Alison Lou. Here’s a look from the line modeled by @emrata. #wwdaccessories
@sarahjessicaparker and @gilt are teaming up on a bridal ready-to-wear line. Tomorrow, Parker will launch SJP by Sarah Jessica Parker Bridal — and as part of the launch, Gilt will offer 15 exclusive styles from the SJP by Sarah Jessica Parker footwear collection that were designed to complement the new line. Made out of 10 styles, the line is designed for a variety of occasions, from bridal showers to receptions. Get more details on WWD.com #wwdfashion