Consumer Confidence Down For 3rd Month; Recession Worries Grow

Americans are becoming increasingly pessimistic about the economy, as the Conference Board’s Consumer Confidence Index fell for the third consecutive month in February, marking its largest monthly drop since August 2021.

Inflation expectations for the year ahead increased to 6% from 5.2% last month, according to the Conference Board. I Photo: Jim.henderson Wikimedia Commons

The percentage of consumers anticipating a recession within the next year has risen to a nine-month high, according to a report by Sabrina Escobar, Elsa Ohlen, and Janet H. Cho for Barron’s Daily.

Stephanie Guichard, the Conference Board’s senior economist for global indicators, stated that consumers remain pessimistic about future business conditions and are less optimistic about future income.

“Pessimism about future employment prospects worsened and reached a 10-month high,” she added.

Last week, the University of Michigan’s Consumer Sentiment Index reported a nearly 10% monthly decline in February from the previous month, indicating widespread economic concerns.

Consumers believe inflation is rising again, further dampening sentiment. The downturn in consumer confidence is impacting retailers as they enter earnings season.

Home Depot’s full-year outlook fell short of expectations, forecasting sales growth of 2.8% and same-store sales growth of 1%.

Although the home improvement retailer surpassed expectations in the fourth quarter, economic uncertainty and high borrowing costs have led consumers to delay major home remodeling projects.

Inflation expectations for the year ahead increased to 6% from 5.2% last month, according to the Conference Board, mirroring the University of Michigan’s inflation forecast.