US consumer confidence dipped in February, as consumers expressed less optimism about the short term outlook, but remained upbeat overall about the economy, the Conference Board says. The consumer confidence index dropped to 96.4 from 103.8 in January, revised slightly upward from the prior reading of 102.9. “After a large gain in January, consumer confidence retreated in February, but still remains at pre-recession levels,” said Lynn Franco, director of economic indicators at
the Conference Board.
Consumers’ views of current conditions dimmed modestly from January. The share of consumers characterising business conditions as “good” dropped to 26.0 per cent from 28.2 per cent, while those seeing business conditions as “bad” declined to 17.0 per cent from 17.3 per cent.
Optimism was “considerably less positive” about conditions in the next six months, the Conference Board said.
The proportion of consumers expecting more jobs in the future dropped to 13.4 per cent from 17.3 per cent.
Consumers also were more downbeat about short-term income growth, with those expecting a rise tumbling to 15.1 per cent from 19.5 per cent, and those expecting a decrease advancing to 12.0 per cent from 10.8 per cent.
The share of those seeing an improvement in business conditions fell to 16.1 per cent from 18.9 per cent.
“While the number of consumers expecting conditions to deteriorate was virtually unchanged, fewer consumers expect conditions to improve, prompting a less upbeat outlook,” Franco said.
“Despite this month’s decline, consumers remain confident that the economy will continue to expand at the current pace in the months ahead.”
Jennifer Lee, analyst at BMO Capital Markets, said the decline in consumer confidence was from “very elevated levels” and that February still marked the second-highest rating since 2007.
However, Lee said the gloomier outlook on the jobs market was surprising.
“This doesn’t go hand-in-hand with the jobless rate, but it does hint that the unemployment may inch up a bit from the current low level of 5.7 per cent,” Lee said.
AFP
