Consumer confidence took a sharp hit in February, with The Conference Board’s Consumer Confidence Index falling to 98.3—down seven points from January and the lowest level since June 2024. The drop was steeper than the modest decline to 102 that economists had projected
By The Numbers: The Present Situation Index, reflecting consumers’ views on current business and labor conditions, fell 3.4 points to 136.5.
- The Expectations Index, measuring the short-term outlook for income, business, and employment, plunged 9.3 points to 72.9—below the recession-warning threshold of 80 for the first time since June 2024.
- Inflation expectations jumped, with consumers now forecasting 6% inflation over the next year, up from 5.2% in January.
Zoom In: The decline was broad but hit certain demographics harder:
- Age: Confidence fell most sharply among consumers aged 35 to 55.
- Income: All income groups saw declines except households earning less than $15,000 annually and those making between $100,000 and $125,000.
What They’re Saying: “This is the third consecutive monthly decline, bringing the index to the bottom of the range that has prevailed since 2022,” said Stephanie Guichard, Senior Economist at The Conference Board.
- “The rise in inflation expectations likely reflects sticky inflation, higher prices for staples like eggs, and concerns about new tariffs.”
Higher Prices Hit Big Ticket Items: While home-buying plans improved slightly, helped by lower mortgage rates, spending intentions for cars and big-ticket items—especially TVs and electronics—continued to slide.
Bottom Line: Rising prices and growing economic uncertainty are weighing on consumer sentiment, threatening to slow spending and economic momentum in the months ahead.
