Consumer confidence slips/Mfr'g, "I have no idea what is going to happen"

The February Conference Board’s Consumer Confidence index fell to 106.7 from a revised 110.9 in January (down from 114.8). Most of the decline came from the Present Situation component which fell by 7.7 pts while Expectations were lower by 1.7 pts. One yr inflation expectations ticked down by one tenth to 5.2% which was the lowest since March 2020 when it stood at 4.5%.

A reason for the confidence drop was the decline in the answers to the job market questions. After rising by 2.3 pts last month, those that said jobs were Plentiful fell by 1.4 pts. Those that said jobs were Hard to Get rose 2.5 pts after falling by 2.1 pts last month and at 13.5 it is a 3 month high. Of note in the expectations category, those who see ‘more jobs’ in the 6 months ahead fell to the lowest level since May 2023. Income expectations for an increase fell to a 4 month low.

Spending intentions were mixed. They rose for a car/truck by .7 pts but after falling by 1.2 pts last month. Intentions to buy a home fell to the lowest level since July 2022 but were up for a major household appliance. Expectations for a vacation over the coming 6 months did drop but they always seem to fall in February.

The rally in the stock market has people thinking it will continue as 42.2% expect higher stock prices ahead, the highest since February 2020 right before you know what. Expectations were low in mid 2022 just as the stock market bottomed.