Consumer confidence plunged in February amid rising economic concerns
A business research team said US consumer confidence fell in February, a monthly decline of more than four years, inflation seemed to be in trouble, and President Donald Trump’s trade war was growing Americans see it as inevitable.
The meeting committee reported that the consumer confidence index this month fell to 98.3 from 105.3 in January. That’s much lower than economists expect, according to a Factset survey, which they expect to read 103.
“The conference committee’s investigation is the third data point in less than a week (after Friday’s PMI and Michigan Sentiment Report) that policy uncertainty linked to Trump is eroding confidence and lowering the economy (at least) to at least reduce it at least at least (Adam Crisafulli, president of Life Knowledge, investment consulting firm, said in a report.
The seven-point decline is the biggest monthly decline since August 2021.
The market on Wall Street fell immediately. The S&P 500 fell 0.8% in morning trading, while the Dow Jones industrial average fell 1.7%. Nasdaq fell 1.6%.
Tariff issues
The board said respondents surveyed by the board expressed concern about inflation, with mentions of trade and tariffs significantly increasing.
Since taking office in January, President Trump has Threat of large tariffs He said this will strengthen the U.S. economy in the long run. While it is not clear that Mr. Trump will receive all the relevant taxes he outlined, he recently imposed a 25% import tax on those countries in plans for Mexico and Canada, but the president has also shown plans to move forward. There are other tariffs.
Mr. Trump plans to rely on new tariffs to set his trade and other policy goals, prompting some economists to predict higher inflation in 2025.
“The survey by the conference committee shows that consumer confidence has deteriorated dramatically in the face of threats to impose large tariffs and cut federal spending and employment.”
“The weakness of confidence strongly suggests that the recent rapid growth in spending on durable goods mainly reflects households seizing tariffs,” he added.
The conference committee report said Tuesday that Americans’ short-term expectations for income, business and job markets fell by 9.3 points to 72.9. The conference committee said reading under 80 could indicate a potential recession in the near future.
The board said the percentage of consumers expected to jump to a nine-month high next year.
“The index says consumers are shocked. Their current situation is not bad, but more and more people are not that good for the future,” said analysts at high-frequency economics in the report. “Since 11,” they added. It may not be a coincidence that the decline in consumer sentiment since the monthly election.”
Growing pessimism
Consumers’ perceptions of the current situation fell by 3.4 points, with a reading of 136.5 this month, and their perceptions of current labor market conditions fell again.
“The perception of current labor market conditions has weakened,” the organization said on Tuesday. “Consumers are pessimistic about future business conditions and are less optimistic about future incomes. Pessimism about future employment prospects worsens and reaches ten Monthly high.”
Consumers seem to be increasingly confident to head to the end of 2024 and generously donate during the holidays. However, the U.S. retail industry fell sharply in January, with cold weather placing some blame on vehicle sales and retail stores on losses.
Retail sales have fallen by 0.9% since December. Ministry of Commerce Reported last week. The decline was the biggest in a year, after two months of healthy growth.
Inflation also remains sticky. So much so that the Fed has taken a more cautious approach to interest rates, cutting benchmark lending rates only in the last three meetings. Fed officials also expressed uncertainty about the new administration’s policies.
Experts say that for the U.S. economy, the latest economic data and pessimistic shifts do not bode well for the U.S. economy.
“Based on all indicators that indicate a decline in consumer, business confidence and sentiment, we expect an economic slowdown,” Carl Weinberg, chief economist at high frequency economics, wrote in a comment to clients.
The Consumer Confidence Index measures Americans’ assessment of current economic conditions and their outlook for the next six months.
Consumer spending accounts for about two-thirds of U.S. economic activity, and economists are closely watching signs of how American consumers feel.
