Consumer Sentiment Dipped in February

Consumer sentiment fell to 91.7 in February, down 0.3 points from the previous month, according to the University of Michigan Consumer Sentiment Index.

“Although consumers are not as optimistic as at the start of last year, the Sentiment Index is just 6.5% below the cyclical peak of 98.1 set in January 2015,” said Richard Curtin, Chief Economist of UM Surveys of Consumers. “Such a small decline is hardly consistent with the onset of a downturn in consumer spending. By way of contrast, in January 2007, the Sentiment Index reached a cyclical peak of 96.9 and then declined by 27% to 70.8 in the February 2008 survey.”

The Current Economic Conditions Index rose 0.4 points to 106.8 in February, but was 0.1 points lower than it was a year ago. The Index of Consumer Expectations fell 0.8 points to 81.9.

“Rather modest wage gains as well as very low inflation have meant that consumers expect increases in their real incomes during the year ahead. Consumers’ most important concern involves how much the slowdown in GDP growth will affect employment growth. At present, consumers anticipate only a slight negative impact on jobs.”