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U.S. consumer confidence plummeted sharply in February than expected, according to a report released Tuesday.
The conference committee released its consumer confidence index on Tuesday, falling to 98.3 in February. This is the lowest level since June. This is well below the previous reading of LSEG Poll's estimated 102.5 in February and 104.1 in January.
“In February, consumer confidence recorded its biggest monthly decline since August 2021,” said Stephanie Gyade, Senior Global Indicator Economist for the Conference Committee. “This is the third consecutive month-by-month decline, bringing an index to the bottom of the range that has been popular since 2022.”
One component of the conference committee's report is the current status index based on consumer ratings of current business and labor market conditions, down 3.4 points to 136.5. The expectations index, based on a short-term outlook for consumer revenue, business and labor market conditions, fell 9.3 points to 72.9, bringing the 80 threshold to mark the first recession since June 2024. It's below.
US consumer sentiment is plunging into worrying about prices due to inflation and tariffs
Consumer trust fell more than expected by economists in February. (Gabby Jones via Getty Images/Gabby Jones/Bloomberg)
“Of the five components of the index, only consumer valuations of current business conditions have improved, but only a few. The view on current labor market conditions has weakened. Consumers are on future business conditions. I became pessimistic, I became optimistic about my future income, and I reached a height of 10 months,” Gichard wrote.
The decline in confidence was shared among all age groups, but was the deepest for consumers between the ages of 35 and 55. It was widespread among income groups, with the only exception being earning less than $15,000 a year, from $100,000 to $100,000. $125,000.
Federal officials hamper the risk of rising inflation amid uncertainty over Trump's policy, tariffs
Consumers hope that inflation will accelerate over the next 12 months, the conference committee found. (Frederic J. Brown/AFP via Getty Images)
The report saw a sharp rise in average inflation forecasts from 5.2% in February. “The increase is likely to reflect a mix of factors, including sticky inflation, but recently the expected impact of prices and tariffs for major household staples such as eggs. This also reflects the sudden rise in prices of the company.”
Gichard continues to rank high inflation and prices in respondents' posting responses, but there has been a sharp rise in mention of trade and tariffs to levels not seen since 2019. response. ”
Federal Reserve Chairman Jerome Powell shows that central banks are ready to wait for further interest rate cuts based on the economic situation. (Photo by Liu Jie/Xinhua via Getty Images/Getty Images)
LPL Financial Chief Economist Jeffrey Roach noted that there could be some behavioral change among consumers based on sentiment expressed in the report's findings, and a temporary cut in the Federal Reserve fees He added that the suspension is unlikely to change in the short term.
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“Consumers are increasingly nervous about the unknown impacts of potential tariffs and could drive consumer demand forward as import prices are expected to be high in the near future.” Roach explained. “One note of caution: Consumer surveys are far more volatile than hard data on retail sales, so the Fed won't change its monetary policy stance at the next few meetings.”
