US consumer confidence fell unexpectedly in February. The Conference Board, a US private investigative agency, announced the results. While the recent labor market was strong, rising prices and uncertainty about the future were stronger.
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The index of expectations for the next six months fell to 69.7, the lowest since July last year. The current situation index rose to 152.8.
Top: Consumer Confidence Index, Bottom: Consumer Expectation Index
Source: Conference Board
The drop in confidence reflected growing pessimism about jobs, incomes and the business environment over the next six months. Inflation is likely to last longer than many had expected, with interest rates likely to rise further. Not only is rising inflation sapping consumer spending power, but aggressive monetary tightening risks pushing the economy into recession.
Meanwhile, job cuts so far have been mostly concentrated in technology and finance, pushing the unemployment rate to its lowest level in 53 years. The percentage of respondents who said they had enough employment rose sharply to 52%, the highest level since April last year. The percentage of respondents who said it was difficult to get a job decreased slightly.
Plans to purchase large home appliances, houses and cars have receded, and the desire to travel has declined.
“Consumers appear to be showing early signs of a reduction in spending in the face of higher prices and rising interest rates,” said Ataman Ozildirim, senior director of economics at The Conference Board.
Median inflation expectations one year ahead fell.
US PCE price index outperforms expectations, increasing pressure to continue rate hikes (3)
See table for detailed statistics.
Original title:US Consumer Confidence Drops on More Pessimistic Outlook(excerpt)
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