The “Barron Round Table” panelists Jacob Sonenshine, Andrew Bary and Teresa Rivas break down three subjects that investors should know this week.
WE Consumer confidence Divided strongly in February more than expected, according to a report published on Tuesday.
The Conference Board published its consumer confidence index on Tuesday at 98.3 in February, the lowest level since June. It is below the estimate of the LSEG survey of 102.5 for February and the previous reading of 104.1 in January.
“In February, consumer confidence has recorded the largest monthly decline since August 2021,” said Stephanie Guichard, principal economist, global indicators, at Conference Board. “This is the third consecutive decrease of the month over the month, putting the index at the bottom of the range which had been prevailing since 2022.”
One of the components of the Conference Board report is the current situation index, which is based on consumer assessments Commercial and labor market conditions and fell from 3.4 points to 136.5. The expectations index – which is based on the short -term perspectives of consumers for income, business and labor market conditions – dropped from 9.3 points to 72.9 and was below the threshold of 80 which generally reports an upcoming recession for the first time since June 2024.
The feeling of American consumers dives concerns about inflation and prices prices
Consumer confidence has decreased in February more than economists expected. (Gabby Jones / Bloomberg via Getty Images / Getty Images)
“Of the five components of the index, only the assessment of consumers of current commercial conditions has improved, although slightly. The views of the current labor market conditions have been weakened. Consumers have become pessimistic about the conditions future commercial and less optimistic about future income. employment prospects Angrava and reached a ten month old, “wrote Guichard.
The drop in confidence was shared in all age groups, but was the deepest for consumers aged 35 to 55. It was also wide among income groups, the only exceptions are those which earn less than $ 15,000 per year and between $ 100,000 and $ 125,000.
Consumers expect inflation to accelerate in the next 12 months, the Board of Directors revealed. (Frederic J. Brown / AFP via Getty Images / Getty Images)
12 months Inflation expectations increased in the 5.2% to 6% ratio in February. Guichard said that “the increase probably reflected a mixture of factors, including sticky inflation, but also the recent leap of the prices of basic foods such as eggs and the expected impact of prices”.
Guichard noted that inflation and prices continue to rank high in the responses of respondents’ writing, but there was a strong increase in trade and prices on an invisible level since 2019. She added that ” comments comments on the current administration And its policies dominated the answers. “”
The president of the federal reserve, Jerome Powell, reported that the central bank is ready to wait for new interest rate drops according to economic conditions. (Photo of Liu Jie / Xinhua via Getty Images / Getty Images)
Jeffrey Roach, chief economist of LPL, noted that there could be changes in behavior among consumers according to the feeling expressed by the conclusions of the report and added that the Federal reserve It is unlikely that the rate cutting break will be modified by it in the short term.
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“Consumers are increasingly nervous about the unknown impacts of potential prices And could advance consumer demand because they anticipate higher prices for imports in the near future, “said Roach.” A note of caution: consumer surveys are much more volatile than the difficult retail data data, so that the Fed will probably not change its position on monetary policy during the next two meetings. “”
