U.S. consumer sentiment in February finished weaker than January on worries about the economy, which could crimp future spending, a report showed Friday.
The University of Michigan’s final February index of consumer sentiment was at 86.7, its lowest level in three months. It was down from the preliminary February figure of 87.4 and January’s final reading of 91.2, said sources who saw the subscription-only report.
The median forecast of Wall Street economists polled by Reuters was 88.0.
“It reflects some loss of momentum from January,” said Anthony Chan, chief economist at J.P. Morgan Private Client Services in Columbus, Ohio. “Activity in January was a bit too euphoric given the underlying economic fundamentals. This month is more realistic,” he said.
The survey’s two other gauges also finished below analyst expectations.
The survey’s index of current conditions fell to 105.6 from 107.7 in early February and 110.3 at the end of January.
The gauge on consumer expectations ended at 74.5, flat against the preliminary February reading of 74.4 and lower than January’s final reading of 78.9.
Other surveys this week showed a mixed picture on consumer sentiment. The Conference Board said its consumer confidence index fell in February to 101.7 from January’s 106.8. In contrast, the ABC News and the Washington Post said their Consumer Comfort Index edged up to -12 in the week ending Feb 26 from -13 the prior week.
Confidence measures are often used as a gauge of future spending patterns. Consumer spending makes up roughly two-thirds of overall U.S. economic activity, and is seen as an indication of strength or weakness in economic growth.
On Thursday, many U.S. retailers reported lower than expected same-store sales in February. They blamed the weakness on harsh winter weather keeping customers away, rather than a drop in consumer optimism.
Most analysts believe that consumer spending will remain solid in 2006 and buttress steady economic growth.
“I just see it as a speed bump,” Chan said of the weaker University of Michigan readings on consumer sentiment in February.