The Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released today (2-28-23) its Consumer Confidence Index® (CCI) for February. The CCI declined to 102.9 (1985=100) in February, down from a revised reading of 106.0 in January.
The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased to a reading of 152.8 (1985=100) in February, up from 151.1 January.
The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—dropped to a reading of 69.7 (1985=100) in February, from 76.0 in January. The Conference Board notes that the Expectations Index is well below 80, which often signals a recession with the next year. It has been below 80 for 11 of the last 12 months.
Adding additional background and his analysis to the release of the January CCI, Dr. Ataman Ozyildirim, Senior Director of Economics at the Conference Board, said:
“Consumer confidence declined again in February. The decrease reflected large drops in confidence for households aged 35 to 54 and for households earning $35,000 or more. While consumers’ view of current business conditions worsened in February, the Present Situation Index still ticked up slightly based on a more favorable view of the availability of jobs. In fact, the proportion of consumers saying jobs are ‘plentiful’ climbed to 52.0 percent—back to levels seen in the spring of last year. However, the outlook appears considerably more pessimistic when looking ahead. Expectations for where jobs, incomes, and business conditions are headed over the next six months all fell sharply in February.
And, while 12-month inflation expectations improved—falling to 6.3 percent from 6.7 percent last month—consumers may be showing early signs of pulling back spending in the face of high prices and rising interest rates. Fewer consumers are planning to purchase homes or autos and they also appear to be scaling back plans to buy major appliances. Vacation intentions also declined in February.”
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