Consumer Confidence Drops to Five-Month Low in February
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U.S. consumer confidence fell in February to the lowest since September as expectations for growth and financial prospects softened amid decades-high inflation.
The Conference Board’s index decreased to 110.5 from a downwardly revised 111.1 reading in January, according to the group’s report Feb. 22. Economists in a Bloomberg survey had called for a reading of 110.
Americans are experiencing the highest inflation since the early 1980s, which is well outpacing wage growth. The Russia-Ukraine conflict may further take a toll on confidence, especially if gasoline prices continue to rise, and surging mortgage rates are making housing that much less affordable.
The Conference Board’s expectations index dropped to 87.5, also a five-month low, while the gauge of current conditions improved to 145.1.
Concerns about the prospects for inflation worsened in February after easing in the prior two months, the group said. That contributed to declining confidence among Americans age 55 and over, some of whom are on fixed incomes, as well as those earning less than $35,000.
“Despite this reversal, consumers remain relatively confident about short-term growth prospects,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. “While they do not expect the economy to pick up steam in the near future, they also do not foresee conditions worsening.”
The share of consumers who expect their incomes to rise in the next six months fell to the lowest level since January 2021. Buying plans for autos, homes and appliances also softened in February. Fewer Americans said they were planning to take a vacation in the coming months.
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