Consumer sentiment dropped to a 16-year low in February, hitting levels that usually sound the alarm bells of recession, on worries about declining incomes and rising unemployment, a survey showed on Friday.
Adding to the grim view, consumers’ expectations for the future also hit a 16-year low while worries about their ability to makes ends meet and the overall economy were as bad as they have been in decades, the Reuters/University of Michigan Surveys of Consumers said.
The Reuters/University of Michigan Surveys of Consumers said its main index of consumer sentiment fell to a 16-year low of 70.8 in February from 78.4 in January.
This was the final reading for February and was the lowest since February 1992. It was up slightly from the preliminary February result reported earlier in the month of 69.6, which also would have been the lowest reading since February 1992.
“Consumer confidence remained at the same low level that was recorded during the recession periods of the mid-1970s, the early 1980s and the early 1990s,” the Reuters/University of Michigan Surveys of Consumers said in a statement.
“The minuscule gain from the mid-month reading did not alter the basic fact that the extent of the recent decline has consistently been associated with a subsequent recession period,” it added.
Wall Street economists had expected a reading of 70.0, according to a Reuters poll. The 57 estimates ranged from 67.8 to 78.0.
The Index of consumer expectations dived to 62.4 -- also its lowest in 16 years -- from 68.1 at the end of January.
“Expectations for personal finances as well as for the entire economy are now as pessimistic as any time during the past quarter century,” they said in a statement.
The index of current economic conditions also fell to a 16-year low of 83.8 in February from 94.4 in January.
One-year inflation expectations jumped to 3.6 percent from 3.4 percent in January. Five-year inflation expectations remained steady at 3.0 percent.