US consumer confidence dips in February 2024: TCB

The present situation index, which assesses consumers' views on current business and labour market conditions, fell to 147.2 in February from 154.9 in January. Additionally, the expectations index, reflecting the short-term outlook for income, business, and labour market conditions, slipped to 79.8, indicating potential recession concerns as readings below 80 often signal economic downturns, as per the survey.

Consumers' optimism waned in February, with less favourable views on business conditions and the job market. Personal financial situation assessments, not included in the present situation index, also declined. Expectations for the next six months deteriorated, with increasing pessimism about future business and labour market conditions and a less optimistic outlook on family financial situations.

The survey revealed an uptick in consumers' perceived likelihood of a US recession over the next 12 months, reversing a three-month trend of declining recession fears. There was a slight increase in the expectation that interest rates would rise, potentially impacting purchasing decisions. Despite these concerns, consumers remained positive about the stock market's future.

Inflation expectations continued to ease, reaching 5.2 per cent in February, the lowest since March 2020. This decline in expected inflation aligns with slowing consumer price inflation and reduced complaints about food and energy prices.

Regarding the current economic situation, consumers noted a slight decrease in the perception of ‘good’ business conditions, while negative views increased. The job market outlook also worsened, with fewer people finding jobs ‘plentiful’ and more saying jobs were ‘hard to get.’

Looking ahead, consumers expressed more pessimism about short-term business conditions, with fewer expecting improvements and more anticipating worsening conditions. The outlook for the labour market followed a similar trend, with increased pessimism about job availability. However, income prospects remained somewhat optimistic, with a slight decrease in those expecting income increases and decreases.

ALCHEMPro News Desk (DP)