Summary Although a tight labor market usually keeps consumers in high spirits, the highest inflation in 40 years may be too much of a problem to overlook as consumers’ confidence slipped in February to 110.5, its lowest since October.
Confidence Wilts Even as Current Conditions ImproveConsumer confidence fell in February to its lowest level in five months. While the headline print was not quite as bad as the consensus had been expecting, it comes on the heels of downward revisions to prior months figures and the expectations component slumped the second-lowest reading since the start of 2021. Interestingly, the current conditions index actually improved in February to its highest level since October. The fact that this report comes on the heels of the best monthly gain for retail sales since the stimulus-fueled surge in March of last year points a contradiction: consumer say they feel lousy, but they do not act like it. Inflation is rising as fast as it has since the early 1980s and today’s report shows that inflation expectations are becoming entrenched with consumers now expecting 7.0% inflation. READ FULL ARTICLE>>