The US Conference Board Consumer
Confidence Index, which had declined in January, fell sharply in February. The
Index now stands at 75.0 (1985=100), down from 87.3 in January. The Expectations
Index declined to 57.9 from 69.3. The Present Situation Index decreased to 100.6
from 114.3 in January.
The Consumer Confidence Survey is
based on a representative sample of 5,000 U.S. households. The monthly survey is
conducted for The Conference Board by TNS. TNS is the world's largest custom
research company. The cutoff date for February's preliminary results was
February 19th.
Says
Lynn Franco, Director of The Conference Board Consumer Research Center:
"The Consumer Confidence Index continues losing ground
and, with the exception of the Iraqi War in 2003, is now at its lowest level in
nearly fifteen years (Nov. 1993, 71.9). The weakening in consumers' assessment
of current conditions, fueled by a combination of less favorable business
conditions and a sharp rise in the number of consumers saying jobs are hard to
get, suggests that the pace of growth in early 2008 has slowed even further.
Consumers' expectations have also deteriorated significantly and are now at a
seventeen-year low (Jan. 1991, 55.3). With so few consumers expecting conditions
to turnaround in the months ahead, the outlook for the economy continues to
worsen and the risk of a recession continues to increase."
Consumers' appraisal of present-day
conditions weakened significantly in February. Those claiming business
conditions are "bad" increased to 21.8 percent from 20.1 percent, while
those claiming business conditions are "good" declined to 18.5 percent from 20.6
percent. Consumers' assessment of the job market was considerably more
pessimistic than last month. Those saying jobs are "hard to get" rose to
23.8 percent from 20.6 percent, while those claiming jobs are "plentiful"
decreased to 20.6 percent from 23.8 percent.
Consumers' short-term expectations
also deteriorated considerably in February. Consumers expecting business
conditions to worsen over the next six months increased sharply to 21.4 percent
from 16.3 percent, while those anticipating business conditions to improve
declined to 9.5 percent from 11.5 percent in January. The outlook for the labor
market was also significantly more pessimistic. Those expecting fewer jobs in
the months ahead surged to 27.9 percent from 21.9 percent, while those
anticipating more jobs declined to 9.0 percent from 10.5 percent. The proportion
of consumers expecting their incomes to increase declined to 17.0 percent from
18.1 percent.