The Conference Board’s Consumer Confidence Index, which had increased moderately in January, declined in February. The index now stands at 92.2 (1985=100), down from 97.8 in January. The Present Situation Index declined from 116.6 to 112.1, while the Expectations Index decreased from 85.3 to 78.9 in February.
Consumers’ assessment of present-day conditions also declined. The percentage saying business conditions were “good” decreased from 27% to 26%. Those saying business conditions are “bad” increased from 18.8% to 19.8%.
Consumers’ appraisal of the labor market was also less positive. Those claiming jobs are “plentiful” decreased from 23% to 22.1%, while those claiming jobs are “hard to get” rose to 24.2% from 23.6%.
Consumers were more pessimistic about the short-term outlook than in January. The percentage of consumers expecting business conditions to improve over the next six months declined from 15.9% to 14.6%, while those expecting business conditions to worsen increased from 10.7% to 12%.
Consumers’ outlook for the labor market was less optimistic. Those anticipating more jobs in the months ahead decreased from 13.4% to 12.2%, while those anticipating fewer jobs increased slightly from 17% to 17.2%.
The proportion of consumers expecting their incomes to increase declined from 18.6% to 17.2%, while the proportion expecting a reduction in income increased from 10.7% to 12.5%.
“Consumer confidence decreased in February, after posting a modest gain in January,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment 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. 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," Franco said.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a global provider of information and analytics around what consumers buy and watch.
The cutoff date for the preliminary results was Feb. 11.