Consumer confidence inches up in February but worries over high costs persist
Consumer confidence edged higher in February as Americans felt a bit more optimistic. But it remains below the peak reached in November 2024.
The Conference Board’s Consumer Confidence Index rose 2.2 points to 91.2 in preliminary results for February, from an upwardly revised 89.0 in January. (The cutoff for preliminary results was Feb. 17).
“Confidence ticked up in February after falling in January, as consumers’ pessimistic expectations for the future eased somewhat,” said Dana M Peterson, chief economist, The Conference Board. “Four of five components of the Index firmed. Nonetheless, the measure remained well below the four-year peak achieved in November 2024 (112.8).”
The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — continued to decline, falling by 1.8 points to 120.0 in February. The Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — rose by 4.8 points to 72.0.
Among demographic groups, confidence on a six-month moving average basis ticked upward in February for consumers under age 35, which continued to be the most optimistic group. Confidence edged down for respondents 35 and older.
“Consumers’ write-in responses on factors affecting the economy continued to skew towards pessimism,” added Peterson. “Comments about prices, inflation and the cost of goods remained at the top of consumer’s minds. Mentions of trade and politics also increased in February. Labor market mentions eased a bit in February, while observations about immigration increased somewhat.”
Inflation
Consumers’ average and median 12-month inflation expectations were little changed but remained elevated. Consumers also believed that interest rates will persist at higher levels over the next 12 months. Most consumers in February continued to expect stock prices to be higher twelve months from now, although the share was slightly smaller than last month.
Purchasing Intents Rise
Consumers’ plans to buy big-ticket items over the next six months rose in February. Those who said “yes” and “maybe” to buying big-ticket items ahead increased, while the number of those saying “no” declined. Used cars, furniture, TVs, and smartphones remained the most popular items within their categories for future purchases.
Buying plans for autos rose on a six-month moving average basis, continuing its uptrend in recent months. Consumers continued to prefer buying used cars. The share of consumers planning to buy a new car was unchanged.
Home-buying expectations were little changed in February but continued to retreat on a six-month basis. Still, the share was above levels one year ago.
Plans to purchase furniture, TVs, dishwashers and ranges on a six-month moving average basis ticked up, while buying plans for refrigerators and washing machines edged down. Plans to buy electronics were little changed in February, except for smartphones, which continued to trend upward on a six-month moving average basis.
Among services categories, anticipated spending over the next six months on utilities, pet care and gambling/lotto services increased, but most other categories dipped or were unchanged. Restaurants, bars, and take-out remained the top category for expected spending ahead and edged 0.1% higher in February.
Below are additional insights from the February report.
Present Situation
Consumers’ views of current business conditions deteriorated on net in February.
- 19.7% of consumers said business conditions were “good,” a small uptick from 19.6% in January.
- 19.0% said business conditions were “bad,” up from 17.3%.
On net, consumers’ views of the labor market improved slightly in February.
- 28.0% of consumers said jobs were “plentiful,” up from 25.8% in January.
- 20.6% of consumers said jobs were “hard to get,” up from 19.0%.
Expectations Six Months Out
Consumers were less pessimistic about future business conditions in February.
- 17.6% of consumers expected business conditions to improve, up from 16.5% in January.
- 21.0% expected business conditions to worsen, down from 23.7%.
Consumers were also less negative about the labor market outlook in February.
- 15.7% of consumers expected more jobs to be available, up from 14.8% in January.
- 26.1% anticipated fewer jobs, down from 28.7%.
Consumers’ outlook for their income prospects was slightly more optimistic in February.
- 17.3% of consumers expected their incomes to increase, up slightly from 17.2% in January.
- 12.3% expected their incomes to decline, down from 12.7%.
The monthly Consumer Confidence Survey based on an online sample, is conducted for The Conference Board by Toluna. The cutoff date for the preliminary results was Feb. 17.