Consumers don't like tariffs
The preliminary February UoM consumer confidence index fell to 67.8 from 74 and that was well below the estimate of 73.7. This was not just a political thing as "The decrease was pervasive with Republicans, Independents, and Democrats all posting sentiment declines from January, along with consumers across age and wealth groups." Let's point to the full 100 bps jump in one year inflation expectations to 4.3% from 3.3%. And on this inflation view jump, "This is only the fifth time in 14 years we have seen such a large one month rise in year ahead inflation expectations." Also, the 5-10 yr guess rose to 3.3% from 3.2% and that is the highest since June 2008.
Current Conditions fell to 68.7 from 74 while the Expectations component fell 2 pts to the lowest level since November 2023.
After dropping by 11 pts last month to the lowest since May 2023, employment expectations did gain 4 pts. The income component rose 1 pt to the highest since last May.
Spending intentions weakened across the board. Intentions to buy a home fell 3 pts, were down by 12 pts for a major appliance and by 1 pt for a vehicle.
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