U.S. Consumer Sentiment Unexpectedly Declined in Late February

(Bloomberg) -- U.S. consumer sentiment unexpectedly fell from an initial February reading and remained near the prior month’s two-year low, signaling that Americans haven’t quite shaken off the government shutdown and trade war.

The University of Michigan’s final February sentiment index was 93.8, below the preliminary reading of 95.5 and missing the 95.9 median forecast in Bloomberg’s survey of economists. The measure of current conditions weakened from the earlier reading to the lowest since November 2016 while expectations were lower than in the initial report.

Key Insights

Official’s View

“The bounce-back from the end of the federal shutdown faded in late February,” Richard Curtin, director of the Michigan survey, said in a statement. “While the overall level of
confidence remains diminished, it is still quite positive.”

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• Buying conditions for household durable goods ticked up to 158 from 155 the prior month.
• A measure of expected change in household income during the next year fell to a nine-month low of 1.7 percent.
• Upper-income households anticipated a 3 percent income gain, “well above those with incomes in the bottom two- thirds,” according to the report.
• A gauge of current personal finances weakened to a two-year low while the measure of expectations improved slightly.
• Surveys ran from Jan. 30 to Feb. 25, while the cutoff for the preliminary report was Feb. 13. The five-week U.S. government shutdown ended Jan. 25.

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