NEW YORK - The consumer confidence index slumped to 46.0 in February from an upwardly revised 56.5 last month, The Conference Board reported this morning.
The January index was originally reported as 55.9.
Economists polled by Thomson Reuters predicted the index would be 55.0.
The present situation index dropped to 19.4 from an upwardly revised 25.2, originally reported as 25.0, while the expectations index decreased to 63.8 from an upwardly revised 77.3 last month, originally seen as 76.5.
“Consumer confidence, which had been improving over the past few months, declined sharply in February,” said Lynn Franco, director of The Conference Board's Consumer Research Center. “Concerns about current business conditions and the job market pushed the present situation index down to its lowest level in 27 years (17.5, February 1983). Consumers’ short-term outlook also took a turn for the worse, with fewer consumers anticipating an improvement in business conditions and the job market over the next six months. Consumers also remain extremely pessimistic about their income prospects. This combination of earnings and job anxieties is likely to continue to curb spending.”
Business conditions were called “good” by 6.2% of respondents in February, a decrease from 8.5% the prior month. Those saying conditions are “bad” rose to 46.3% from 44.7%.
The percentage of consumers expecting a pickup in business conditions in the next half year slid to 16.7% from 20.7%, while 15.3% said they expect conditions to worsen, up from 12.7% the prior month.
On the jobs front, those who believe jobs are “plentiful” decreased to 3.6% in February from 4.4% in January, while the number saying jobs are “hard to get” increased to 47.7% this survey from 46.5%. The respondents who see more jobs becoming available in a half year, fell to 13.4% from 15.8%. Those expecting fewer jobs to become available rose to 24.6% from 18.9%, The Conference Board reported.
Income expectations were more pessimistic, with 9.5% of consumers anticipating an increase in their income in the next six months, down from the prior month's 11.0%, while 17.2% expect their income to decrease, up from 16.3% in the prior month’s survey.
The number of consumers who expected to buy a home in the next six months crept up to 2.7% from 2.4%, while the number of respondents planning to buy a car dipped to 4.8% from 5.2%. More consumers than last month said they plan to buy a major appliance in the next six months (27.1% vs. 26.3%).
Fewer respondents than last month (36.8% vs. 37.0%) expect to take a vacation in the next six months, but more said they would stay in the U.S. rather than leave the country. Cars rather than airplanes were the preferred mode of travel, by a 19.6%-16.1% margin.
The consumer confidence survey is based on a representative sample of 5,000 U.S. households for The Conference Board by TNS.
