Consumers have turned bearish about the economic situation.
The Conference Board reports its Consumer Confidence Index, after posting a moderate gain in January, turned downward this month, dipping from 97.8 to 92.2.
The decrease was led by the Present Situation Index, which fell from 116.6 to 112.1, and the Expectations Index, which dropped to 78.9 from January's reading of 85.3.
“Consumers’ assessment of current conditions weakened, primarily due to a less favorable assessment of business conditions,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ short-term outlook grew more pessimistic, with consumers expressing greater apprehension about business conditions, their personal financial situation, and to a lesser degree, labor market prospects.
Franco said 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.”
The percentage of consumers saying business conditions were “good” decreased from 27.7% to 26.0%, while those who think they're “bad” increased from 18.8% to 19.8%.
Consumers’ appraisal of the labor market was also negative, with those who say jobs are “plentiful” falling from 23.0% to 22.1%, while those who think jobs are “hard to get” rose to 24.2% from 23.6%.
Consumers were more pessimistic about the short-term outlook than in January. The percentage of consumers expecting business conditions to improve over the next six months dropped from 15.9% to 14.6%, while those who look for conditions to worsen jumped to 12.0% from 10.7%.
Labor market outlook gloomy
Those anticipating more jobs in the months ahead decreased from 13.4% to 12.2%, while those expecting fewer jobs inched up from 17.0% to 17.2%.
The proportion of consumers expecting their incomes to increase fell from 18.6% to 17.2%, while the proportion expecting a reduction rose from 10.7% to 12.5%.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen around what consumers buy and watch. The cutoff date for the preliminary results was February 11.