Consumer confidence slips again
WASHINGTON — Consumer confidence dipped for the second straight month as stubborn inflation and anxiety over a potentially slowing economy weighed on Americans.
The Conference Board reported Tuesday that its consumer confidence index slipped to 102.9 in February, from a reading of 106 in January.
The business research group’s present situation index — which measures consumers’ assessment of current business and labor market conditions — ticked up to 152.8 from 151.1 last month.
The board’s expectations index — a measure of consumers’ six-month outlook for income, business and labor conditions — tumbled to 69.7 in February from 76 in January. A reading under 80 often signals a recession in the coming year, the Conference Board said.
Consumers have been a pillar in the U.S. economy, not ready to slow spending even as the Federal Reserve tightens its monetary policy and signals more rate hikes ahead in its effort to cool the economy and bring down persistent, four-decade high inflation. Those rate increases can raise the cost of using credit cards or taking out a loan for a house, car or other purchases.
Earlier in February, the government reported that retail sales jumped 3 percent in January following a two-month slide. Americans boosted their spending at stores and restaurants at the fastest pace in nearly two years.
But that confidence could be waning.
The board says consumers appear to be showing early signs of pulling back their spending, particularly on bigticket items like cars, major appliances and homes. Plans to take vacations were also dialed back in February.
Eearnings reports from major retailers this month have echoed consumer anxiety. While Target, Home Depot and others largely met Wall Street’s quarterly sales and profit expectations, they have cut their forecasts for 2023 with inflation lingering longer than expected.
“The strong jobs market continues to boost consumers’ spirits, but they see trouble ahead in categories that affect them most: jobs and incomes,” said Robert Frick, an economist with Navy Federal Credit Union.
The Fed’s preferred inflation gauge rose last month at its fastest pace since June, an alarming sign that price pressures remain entrenched.