The consumer confidence in the United States tumbled beyond expectations in the month of February as the initial elation over a decline in the prices of fuel faded and the Americans became less positive about the prospects for income and jobs.
According to the Conference Board report, its sentiment index dropped to 96.4 from a revised reading of 103.8 in January, the highest level since August 2007.
The median forecast of 80 economists in news agency survey called for a drop in consumer confidence to 99.5.
A latest price rise in gasoline from a six-year low is likely checking the enthusiasm of several households after a fall in prices in 2014 and a pickup in job hiring also contributed in building the consumer confidence.
The consumer expectations index for the coming six months dropped to 87.2 from January’s 97 reading. The 9.8-point decline was the biggest since the US government shutdown in October 2013.
Lynn Franco, Conference Board director of economic indicators, in a statement said, “Despite this month’s decrease, consumers remain confident that the economy will continue to expand at the current pace in the months ahead.”
The economists and the Federal Reserve Bank have noted that the faster growth in wage has remained a missing piece of the current expansion program. According to the board, the income expectations dropped back in the month of February after increasing in January.
The survey showed 15.1 percent of households in February expected the surge in their incomes in the coming six months, against 19.5 percent saying that last month. Another 12.0 percent of the participating households believe their incomes will decrease in the next six months as compared to January’s response rate of 10.8 percent.