Consumers became more pessimistic in February, after reporting rising confidence for two straight months.
The Conference Board said its consumer confidence index is now at 92.2, down from 97.8 last month. Both components of the index fell this month. The present situation index decreased to 112.1 from 116.6, while the expectations index dropped to 78.9 from 85.3.
Lynn Franco, director of economic indicators at The Conference Board, said, “consumers’ assessment of current conditions weakened, primarily due to less favorable assessment of business conditions.”
Franco added that consumers’ short-term outlook grew more pessimistic as they became apprehensive about “business conditions, their personal financial situation and to a lesser degree, labor market prospects.” And while ongoing turmoil in the financial markets could be rattling consumers, Franco said “their assessment of current conditions suggests the economy will continue to expand at a moderate pace in the near-term.”
As for present-day conditions, those who said business conditions are good dipped to 26 percent from 27.7 percent, while those who said business conditions are bad inched down to 18.8 percent from 19.8 percent. Their assessment of conditions on the labor front was also less positive, with those saying that jobs are “plentiful” falling to 22.1 percent from 23 percent.
Looking ahead six months, consumers who expect business conditions to improve fell to 14.6 percent from 15.9 percent. Those who expect conditions to worsen rose to 12 percent from 10 percent. They were also more pessimistic about the jobs market, with those who anticipate more jobs falling to 12.2 percent from 13.4 percent and those who expect fewer jobs inching up to 17.2 percent from 17 percent.
Respondents to the survey, which had a cutoff date of Feb. 11 for preliminary results, also were pessimistic about their incomes. Those who said they expect their incomes to increase over the next six months fell to 17.2 percent from 18.6 percent. Those who anticipate a reduction in income rose to 12.5 percent from 10.7 percent.