Consumer Confidence Tepid in February as Inflation Concerns Rise

New COVID-19 cases are on the decline; U.S. employers added a robust 467,000 jobs last month; and January retail sales came in higher than analysts expected, but American consumers aren't exactly jumping with economic joy, the latest survey from The Conference Board suggests.

U.S. consumer confidence dipped again, slightly, in February, The Conference Board said Feb. 22 in its monthly report. Following revisions to January's numbers, the New York-based nonpartisan think tank said the U.S. Consumer Confidence Index now stands at 110.5, down from 111.1 in January.

The slump stems from another dimming of consumers' short-term economic outlook: The Expectations Index, which looks at consumers' predictions for business and labor-market conditions as well as their own financial prospects and slid to 87.5 from 88.8.

"Expectations about short-term growth prospects weakened further" in February, "pointing to a likely moderation in growth over the first half of 2022," said Lynn Franco, The Conference Board's senior director of economic indicators. "Meanwhile, the proportion of consumers planning to purchase homes, automobiles, major appliances, and vacations over the next six months all fell."

In contrast, the Present Situation Index, which considers consumers' evaluation of current business and labor-market conditions, edged up a bit this month, to 145.1 from 144.5. The cutoff date for preliminary February survey results was Feb. 16.

After two months of declines, consumer concerns about inflation rose again this month, Franco noted, and the share of consumers who said current business conditions are good slipped to 18.7% from 20%.

U.S. consumers don't see the economy gaining a lot of ground, but they don't expect a significant worsening of the economic landscape, either, she said. Still, with inflation reaching 40-year highs in January, "confidence and consumer spending will continue to face headwinds from rising prices in the coming months," Franco concluded.