United States: Confidence among consumers wanes in February after two months of improvement
February 23, 2016
The consumer confidence indicator elaborated by the Conference Board decreased from a revised 97.8 points in January (initially reported: 98.1 points) to 92.2 points in February. February’s result notably undershot the 97.3 points the markets had expected. The confidence index continues to follow the volatile path registered through 2015. February’s result marks the first drop following two consecutive months of increase.
The drop in February was broad based and stemmed from a loss in confidence in households’ perception regarding their present economic conditions as well as regarding their economic prospects in the next six months. The assessment of current economic conditions worsened in February due to consumers’ less favorable opinions regarding business conditions. The recent rout in financial markets, particularly the U.S. stock markets, might be the main cause of the drop in confidence. Meanwhile, consumers’ view of the labor market was less optimistic than in the previous month.
The director of the Board pointed out that, “continued turmoil in the financial markets may be rattling consumers, but their assessment of current conditions suggests the economy will continue to expand at a moderate pace in the near-term”.
Author: Ricardo Aceves, Senior Economist