Consumer Confidence Falls Slightly in February

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CF Funding comments on January's consumer confidence index from The Conference Board.

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The expectations index was the largest cause for the decrease this month, as it dropped from 80.8 to 75.7

The Conference Board Consumer Confidence Index, released February 25th, has fallen slightly from January’s 79.4 score to 78.1. This index is produced by The Conference Board by Nielsen, “a leading global provider of information and analytics around what consumers buy and watch.” The index measures consumer answers from five categorized questions: current business conditions, current employment conditions, expectations of business conditions six months hence, expectations of employment six months hence, and expectations of the consumer’s total family income six months hence.

The expectations index was the largest cause for the decrease this month, as it dropped from 80.8 to 75.7. However, current conditions have showed great results over the past few months. Lynn Franco, Director of Economic Indicators at The Conference Board, “Consumer confidence declined moderately… on concern over the short-term outlook for business conditions, jobs, and earnings… while expectations have fluctuated over recent months, current conditions have continued to trend upward and the Present Situation Index is now at the highest level in almost six years… This suggests that consumers believe the economy has improved, but they do not foresee it gaining considerable momentum in the months ahead.” CF Funding has noticed this great improvement in our economy over the past year and has reported such on the CF Funding News Feed, in articles such as “Mortgage Delinquency Declines for 8th Consecutive Quarter” and “Foreclosures Decrease, Home Prices Rise.”

Consumers’ view on current conditions has improved for the fourth consecutive month now. Those who consider business conditions “good” increased 0.7 points and those who consider business conditions “bad” declined 0.8 points to 22.6 percent. Consumers also became more confident in the job market this month, as those claiming jobs are “plentiful” increased 1.4 percent, and those who said jobs are hard to get decreased 0.2 percent to 32.5 percent. Of course, the goal is quite lower than 32 percent for consumer confidence in the labor market, but CF Funding expects confidence to rise as the economy improves in 2014.

The amount of consumer who expect their income to increase over the next 6 months has declined slightly from 16.6 percent to 15.4 percent, however, those who expect their income to decrease also declined (meaning most expect it to stay the same).

CF Funding would like to remind readers that the less-than-ideal expectations of consumers are largely based on the slowdown of the economy due to harsh winter weather. As the weather improves over the next few months, expect to see improvements in consumer spending and an increase in consumer confidence. For updates on the housing market and other economic indicators, follow CF Funding on Twitter at http://www.twitter.com/CF_Funding.

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Giorgio U Ferrero
CF Funding
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