Still below the breakeven number of 100, dividing positive from negative sentiments, the Conference Board Consumer Confidence Index edged up by 2.2 points in early February to 91.2 from an upwardly revised 89 in January.
Consumer intentions to purchase big-ticket items over the next six months rose in February as those who said they would and those who said maybe in the Conference Board Consumer Confidence survey increased, while the number of those saying they wouldn’t declined.
The Present Situation Index, a consumer view of current business conditions, deteriorated on net in February, with 19.7% of consumers saying business conditions were good, a small uptick from 19.6% in January, and 19% saying business conditions were bad, up from 17.3%. Overall, the consumer view of the labor market improved slightly in February as 28% of survey respondents said jobs were plentiful, up from 25.8% in January, and 20.6% of consumers said jobs were hard to get, up from 19%. As for expectations six months out, consumers were less pessimistic: 17.6% expected business conditions to improve, up from 16.5% in January, and 21% expected business conditions to worsen, down from 23.7%. Consumers were less negative about the labor market in February, with 15.7% expecting more jobs to be available, up from 14.8% in January, and 26.1% anticipating fewer, down from 28.7%. The consumer outlook for personal income prospects was a bit more optimistic in February, with 17.3% of consumers expecting their incomes to increase, up slightly from 17.2% in January, and 12.3% anticipating them to slip, down from 12.7%.
In demographic terms, confidence on a six-month moving average basis ticked upward in February for consumers under age 35, who remained the most optimistic echelon. However, confidence edged down for respondents 35 and older. On a six-month moving average basis, confidence among Generation Z rose, consistent with soundings from the under-35 group, but fell for other generations. By income, confidence on a six-month moving-average basis continued to dip for most brackets.
Consumer average and median 12-month inflation expectations were little changed but remained elevated. As for borrowing, consumers believed interest rates would remain higher over the next 12 months. Most consumers in February continued to expect stock prices to be higher 12 months hence, although the share was down slightly from December.
Consumer views of their Family’s Current Financial Situation retreated in February, with expectations coming in as less optimistic. Meanwhile, the share of consumers who said a U.S. recession over the next 12 months is very likely fell while those saying one was not likely rose.
“Confidence ticked up in February after falling in January, as consumers’ pessimistic expectations for the future eased somewhat,” said Dana Peterson, chief economist at The Conference Board, in announcing the financial data. “Four of five components of the Index firmed. Nonetheless, the measure remained well below the four-year peak achieved in November 2024: 112.8. Consumers’ write-in responses on factors affecting the economy continued to skew towards pessimism. Comments about prices, inflation and the cost of goods remained at the top of consumers’ minds. Mentions of trade and politics also increased in February. Labor market mentions eased a bit in February, while observations about immigration increased somewhat.”
