Consumer confidence in U.S. fell more than forecast in February
Consumer confidence in the U.S. fell more than forecast in February as Americans grew more pessimistic about the outlook for the economy and employment.
The Conference Board's index decreased to 78.1 from a revised 79.4 in January that was weaker than initially estimated, the New York-based private research group reported today. The median forecast in a Bloomberg survey of economists called for a reading of 80.
The share of Americans who said business conditions would improve in the next six months declined to a four-month low. Bigger gains in payrolls and wages would help the economy recover from colder temperatures and snowstorms that weighed on growth at the start of the year.
“The biggest thing that'll help is if income growth was accelerating, which means you'd need a stronger labor market and more jobs being created,” Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut, said before the report. “On both counts we've had some progress, but certainly not enough to make people enthusiastic about their prospects.”
Estimates in the Bloomberg survey of 82 economists ranged from 75 to 86 after a previously reported January reading of 80.7. The index averaged 53.7 in the recession that ended in June 2009.
Another report today showed home prices rose at a slower pace in the 12 months ended in December. The S&P/Case-Shiller index of property prices in 20 cities climbed 13.4 percent from December 2012 after a 13.7 percent increase in the year ended in November, a report from the group showed in New York.
Consumer Expectations
The Conference Board's measure of consumer expectations for the next six months declined to 75.7 from 80.8 a month before. The share of consumers who said jobs would become more plentiful fell to 13.3 percent from 15.1 percent.
“Consumer confidence declined moderately in February, on concern over the short-term outlook for business conditions, jobs and earnings,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement. “Consumers believe the economy has improved, but they do not foresee it gaining considerable momentum in the months ahead.”
The Conference Board's present conditions measure increased to 81.7 this month, the highest since April 2008, from 77.3. Consumer views of current labor-market conditions improved. The share of respondents who said jobs were plentiful rose this month to 13.9 percent, the most since June 2008, from 12.5 percent.
The difference between those who said employment opportunities were plentiful and respondents who said jobs were hard to get was the highest since August 2008.
Other confidence measures have been mixed. The Thomson Reuters/University of Michigan preliminary February index was unchanged at 81.2 from a month earlier. The Bloomberg Consumer Comfort Index showed the gap between positive and negative expectations rose to minus 3 in February, an eight-month high.
Retail Sales
The drop in the Conference Board's index follows figures that showed purchases at U.S. retailers declined in January by the most since June 2012. Retail sales fell 0.4 percent as bad weather and limited employment growth prompted shoppers to pull back, Commerce Department figures showed this month.
“While some economic metrics are improving modestly, the recovery has been uneven, and mostly measures remain well below pre-recession level,” Martin Barrington, chief executive officer at Richmond, Virginia-based Altria Group Inc., the largest seller of tobacco in the U.S., said at a conference in New York on Feb. 19.
Higher prices at the gas pump may also weigh on consumers' moods. The average cost of a gallon of regular gasoline was $3.43 yesterday, the highest level since September, according to data from AAA, the nation's largest motoring organization.