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U.S. consumer confidence unexpectedly fell for the second straight month in February as Americans' outlook on the economy tumbled further, showing how persistent inflation is weighing on shoppers amid looming recession fears.
The Conference Board's latest Consumer Confidence Index released Tuesday declined to 102.9 for this month, slipping from 106.0 in January — which was revised lower. Economists polled by Refinitiv had expected February's index to tick up to 108.5.
Shoppers look at items displayed at a grocery store in Washington, DC, on February 15, 2023. – Retail sales in the United States rebounded in January, government data showed Wednesday, logging the biggest gain since early 2021 as policymakers watch f (Stefani Reynolds/AFP via Getty Images) / Getty Images)
"The decrease reflected large drops in confidence for households aged 35 to 54 and for households earning $35,000 or more," said Ataman Ozyildirim, The Conference Board's senior director of economics.
Consumers' assessment of the current business climate also worsened in February, with 17.8% of respondents answering that business conditions were "good," down from 19.9% in January.
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However, more consumers said the labor market was more favorable this month, with 52% saying jobs were "plentiful," up from 48.1%.
Construction workers cross a street in Wilmette, Ill., Jan. 5, 2023. Americans said the labor market improved in February, according to the latest Consumer Confidence Survey. (AP Photo/Nam Y. Huh / AP Newsroom)
Still, the survey indicated Americans' have a dismal view of how economic conditions look in the near future.
"Expectations for where jobs, incomes, and business conditions are headed over the next six months all fell sharply in February," Ozyildirim reported, noting that "consumers may be showing early signs of pulling back spending in the face of high prices and rising interest rates."
TARGET CEO GIVES CAUTIOUS OUTLOOK AFTER SALES, PROFITS IMPROVE Shoppers in Atlanta, Ga., Feb. 14, 2023. The chief economist for The Conference Board says there could be indications consumers are starting to rein in spending due to inflation and interest rate hikes. (Dustin Chambers/Bloomberg via Getty Images / Getty Images)
"Fewer consumers are planning to purchase homes or autos and they also appear to be scaling back plans to buy major appliances," the economist added. "Vacation intentions also declined in February."
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