Expectations for future economic growth have dropped, according to the study. Consumers lost faith in the US economy in February, according to the Conference Board. Fears about inflation are impacting future expectations. Following a drop, a month earlier, the organization’s consumer confidence index slipped marginally to 110.5 from 111.11 in January. The current situation index, which gauges current economic circumstances, rose to 145.1 in February from 144.5 in January. The expectations index, which measures how consumers feel about the economy’s short-term prospects, was 87.5 in February, down from 88.8 in January.
“Consumer confidence fell somewhat for the second month in a row in February,” said Lynn Franco, The Conference Board’s senior director of economic indicators. “The Present Situation Index rose slightly in Q1. It showed that the economy grew but did not gain traction.” “Short-term growth prospects have worsened much further. This indicated growth will likely decline in the first half of 2022,” she added. “Over the next six months, the percentage of customers planning to purchase homes, automobiles, big appliances, and vacations will all fall.”
Outlook on the Economy
Consumers do not anticipate the economy to strengthen in the next months, according to Franco. But they also do not have foresight of the circumstances deteriorating.
Nonetheless, rising prices will continue to be a drag for consumer confidence and spending in the coming months. Consumer polls in recent months have revealed divergent attitudes among Americans. The Conference Board found a more hopeful tone and the University of Michigan sentiment index finding a more pessimistic tone. The shorter Conference Board survey performs well when labor markets are strong, as they are today, whereas the lengthier Michigan survey performs badly when inflation is growing, as it is now.
“We are likely to go with the Conference Board’s optimistic consumer confidence assessment given the healthy economic forecast,” BCA Research wrote in research comparing the two on Monday
