Consumers are more pessimistic about the economic outlook for February as they worry about slowing the economy and rising inflation, the conference committee reported Tuesday.
The board’s consumer confidence index fell to 98.3 that month, down 7 points, falling below Dow Jones’ forecast at 102.3. This was the lowest read since June 2024 and the largest monthly decline since August 2021.
“Opinion of the current labor market situation has weakened. Stephanie Gyad, senior economist on the Global Indicators board, said: “Pessimism about the outlook for future employment has deteriorated.” , it reached a height of 10 months.”
The decline in consumer confidence comes as President Donald Trump threatens additional tariffs on US trading partners. Trump said Monday that his duties against Canada and Mexico will “move forward” in March after a February delay.
Economists will cause another inflation when policymakers consider whether interest rates are further reduced or stable as they weigh the impact of Trump’s aggressive fiscal and trade policy moves. I’m worried about the possibility.
Consumers are also worried. 12-month inflation expectations rose to 6% from 5.2% the previous month, well above the Federal Reserve 2% target.
“This increase is likely to reflect a mix of factors including sticky inflation, as well as recent jumps in prices for major household staples like eggs and expected impacts of tariffs. It reflects,” Gichard said. “Trade and tariff mentions have risen sharply and have returned to levels that are invisible since 2019. Most notably, comments on the current administration and its policies dominate the response.”
“We should expect short-term behavioral changes within consumers,” writes Jeffrey Roach, chief American economist at LPL Financial. “Consumers are increasingly nervous about the unknown impact of potential tariffs and could drive consumer demand forward as import prices are expected to be high in the near future.”
The shares moved temporarily low after the release, and the Treasury was added to the sharp slides of the day. The 10-year Treasury yield, a traditional barometer of growth expectations, fell to nearly 10 basis points, 0.1 percentage points, and 4.29%.
While most economic indicators reflect continuous growth, conference committee gauges are consistent with other recent research showing weakening confidence. Last week, the University of Michigan reported a monthly decline of about 10% in February, an increase more than expected, but respondents’ five-year inflation outlook reached its highest level since 1995.
Conference committee surveys encountered declines in age groups and income levels. The survey covered the period until February 19th.
In addition to the decline in overall reliability, the expected index dropped from 9.3 points to a 72.9 read. This is the first time since June 2024 that the measure has fallen below levels consistent with the recession. However, the current conditions measured have improved somewhat, with 19.6% saying the conditions are “good,” up 1.1 points since January.
However, the labor market measures have deteriorated, with 33.4% saying employment is “rich” and 16.3% saying positions are “hard to get”. It compared to the January 33.9% and 14.5% respectively.