Consumers’ outlook for income, business and labor market conditions in February were below the threshold that usually signals a future recession, according to findings from The Conference Board.
The board’s monthly consumer expectations index, which gauges consumer short-term outlook on economic issues, fell 9.3 points to a reading of 72.9 for results through Feb. 19. That is the lowest level since June 2024. It was also below the threshold of 80, which usually signals the possibility of a future recession.
One bright spot in the board’s findings, which are based on online survey responses from 5,000 consumers, was that interest in buying homes continues to recover, likely supported by the recent decline in mortgage rates. However, even considering greater interest in purchasing homes, winter housing sales remain slow.
“In February, consumer confidence registered the largest monthly decline since August 2021,” said Stephanie Guichard, senior economist, global indicators at The Conference Board. “This is the third consecutive month-on-month decline, bringing the index to the bottom of the range that has prevailed since 2022.”
The Conference Board’s overall consumer confidence index fell 7 points to 98.3. An index score of 100 is equal to the confidence level in 1985. The present situation index, which is based on how consumers feel about the current business and labor market conditions, fell only 3.4 points to 136.5.
The fall in confidence was spread across all age groups but was deepest for consumers between 35 and 55 years old. The decline was also seen across income groups, with the only exception being among households earning less than $15,000 per year and those earning between $100,000 and $125,000.
Guichard said of the five components that compose the index, only consumers’ assessments of present business conditions improved, but just slightly. Views of current labor market conditions weakened. Consumers also became pessimistic about future business conditions and less optimistic about future income growth. Pessimism about future employment prospects reached a 10-month high.
The index found that those surveyed expect inflation to rise to between 5.2% to 6% in the next 12 months. The rise reflects the current lingering inflation in the market, as well as the recent jump in the price of commodities, such as eggs, and the expected future impact of tariffs.
