Consumer confidence ticked down in February as expectations for the economy softened, according to data from the Conference Board on Tuesday.
High inflation—which might continue to rise because of the Russia-Ukraine conflict—remains a top concern for consumers, dampening spending plans and raising expectations of further price increases.
The confidence index declined to 110.5—the lowest since September—from 111.1 in January, while the expectations component dropped to 87.5 from 88.8 previously.
The tight labor market has helped to offset some of the concerns over inflation and uncertainties, keeping current economic sentiment from falling.
More than half of consumers, or 53.8%, reported that jobs were plentiful, a historically strong reading, although down from 55% the month before, the Conference Board reported.
But that does not help with income from the consumer’s perspective as the income subindex for six-month expectations dropped to 3.6%, the lowest since February last year. Wage growth has not been able to catch up with inflation recently.
Spending plans on major goods items and vacations all declined in February because of high prices and increasing mortgage rates in the face of a potential rate hike in March.
With the price of oil inching closer to $100 a barrel as supply from Russia—one of the world’s biggest oil exporters—declines, we should expect consumer confidence to take a more significant hit in the coming months, especially if the Ukraine conflict worsens.
