In February, consumer confidence experienced a significant decline, signaling growing concerns about the economy's trajectory. The Consumer Confidence Index fell to 98.3, marking a drop of nearly 7% from the previous month and falling short of the Dow Jones forecast of 102.3. This is the lowest reading since June 2024 and represents the largest monthly drop since August 2021. The Expectations Index also tumbled, decreasing by 9.3 points to reach a reading of 72.9, its first fall below recession-consistent levels since June 2024.
The recent findings from the Conference Board align with other surveys that reveal waning confidence across various demographics. The decline spanned across age groups and income levels, highlighting a widespread sentiment of economic pessimism. Consumers expressed growing concern over future business conditions, future income, and employment prospects. The five-year inflation outlook among respondents has now reached its highest level since 1995, further contributing to anxiety about the economy's future.
"Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income," said Stephanie Guichard, the board's senior economist for global indicators.
The board's data indicates that consumers' outlook on employment has reached a ten-month high in pessimism, reflecting increased worries about slowing economic growth and rising inflation. This decline in confidence underscores the challenges facing the economy as it grapples with these complex issues.
"Pessimism about future employment prospects worsened and reached a ten-month high," added Stephanie Guichard.
The Consumer Confidence Index's dip to 98.3 was notably below forecasts, pointing to an unexpected drop in consumer sentiment. The Expectations Index's significant decrease to 72.9 reflects heightened concerns that have not been seen since the mid-2024 period. These developments suggest that consumers are increasingly bracing themselves for potential economic downturns.