US Consumer Confidence Index Declines for Third Consecutive Month in February

On Tuesday, The Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released its Consumer Confidence Survey for February.

• The Consumer Confidence Index declined 7.0 points to a reading of 98.3 in February, down from 104.1 in January (1985=100).
• The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell 3.4 points to a reading of 136.5 in February.
• The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—dropped 9.3 points to a reading of 72.9 in February. This is the first time since June 2024 that the index was below the threshold of 80 that usually signals a recession ahead, The Conference Board noted.

February’s fall in confidence was shared across all age groups but was deepest for consumers 35–55 years old. The decline was also broad-based among income groups, with the only exceptions among households earning less than $15,000 a year and $100,000–125,000.

The cutoff date for the preliminary results was February 19.

In a statement accompanying the report, Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board, said:

“In February, consumer confidence registered the largest monthly decline since August 2021. This is the third consecutive month on month decline, bringing the Index to the bottom of the range that has prevailed since 2022. Of the five components of the Index, only consumers’ assessment of present business conditions improved, albeit slightly. Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a ten-month high.

Average 12-month inflation expectations surged from 5.2% to 6% in February. This increase likely reflected a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs. References to inflation and prices in general continue to rank high in write-in responses, but the focus shifted towards other topics. There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019. Most notably, comments on the current Administration and its policies dominated the responses.”