The results of the Conference Board’s monthly Consumer Confidence Survey are out.
The report’s headline index fell to 78.1 from January’s downward-revised 79.4 reading.
The consensus estimate of market economists polled by Bloomberg was that the report’s headline index would tick down to 80.0 from January’s initially-reported 80.7 reading.
“It is worth noting that the survey period for this index ends mid-month, with the measure not capturing some of the improvement in consumer sentiment in the latter half of February,” says Gennadiy Goldberg, a U.S. strategist at TD Securities.
“In fact, the decline in the index was solely caused by a fall in the expectations component of the survey, which declined to 75.7 from 80.8 as current conditions rebounded to a cycle high of 81.7 from 77.3. We look for the removal of debt ceiling uncertainty and a recovery in equity prices to help support the expectations component of the index in future months, with confidence continuing to show modest improvement.”
The labour differential (a measure of survey respondents reporting that jobs are plentiful less those reporting that jobs hard to get) provided some better news, continuing to improve to another post-crisis high in February, rising to -18.6 from January’s -19.9 reading.
“This ongoing tightening of labour market conditions will increase the pressure on the Fed to adjust their forward guidance, likely in a more qualitative direction,” says Neil Dutta, head of U.S. economics at Renaissance Macro.
“After all, even though attitudes over the labour market improved, income expectations are only marginally positive.”
Below is the full text of the Conference Board release.
The Conference Board Consumer Confidence Index®, which had increased in January, fell moderately in February. The Index now stands at 78.1 (1985=100), down from 79.4 in January. The decline was driven by the Expectations Index, which dropped to 75.7 from 80.8. The Present Situation Index, by contrast, climbed from 77.3 to 81.7.
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was February 13.
“Consumer confidence declined moderately in February, on concern over the short-term outlook for business conditions, jobs, and earnings,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “While expectations have fluctuated over recent months, current conditions have continued to trend upward and the Present Situation Index is now at its highest level in almost six years (April 2008, 81.9). This suggests that consumers believe the economy has improved, but they do not foresee it gaining considerable momentum in the months ahead.”
Consumers’ appraisal of current conditions improved for the fourth consecutive month. Those claiming business conditions are “good” increased to 21.5 per cent from 20.8 per cent, while those claiming business conditions are “bad” declined to 22.6 per cent from 23.4 per cent. Consumers’ assessment of the labour market also improved. Those claiming jobs are “plentiful” increased to 13.9 per cent from 12.5 per cent, while those saying jobs are “hard to get” decreased slightly to 32.5 per cent from 32.7 per cent.
Consumers’ expectations, which had been improving over the past two months, retreated in February. The percentage of consumers expecting business conditions to improve over the next six months decreased to 16.3 per cent from 17.0 per cent, while those anticipating business conditions to worsen increased to 13.3 per cent from 12.2 per cent. Consumers’ outlook for the labour market was also more pessimistic. Those expecting more jobs in the months ahead declined to 13.3 per cent from 15.1 per cent, while those anticipating fewer jobs increased to 20.6 per cent from 19.0 per cent. The proportion of consumers expecting their incomes to increase declined from 16.6 per cent to 15.4 per cent, but those anticipating a decrease in their incomes also declined, from 13.9 per cent to 13.1 per cent.