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US consumer confidence drops for second month: Survey

People wearing protective masks shop at Macy's Herald Square following the outbreak of the coronavirus disease (COVID-19) in the Manhattan borough of New York City, New York, US, December 26, 2020. (File photo by Reuters)

A gloomier outlook on where jobs, incomes and business conditions are headed is weighing on American consumers, with US consumer confidence falling for a second straight month, said survey data released Tuesday.

The consumer confidence index slipped again in February to 102.9 from 106.0 in January, according to The Conference Board, despite analyst expectations of a pick-up.

"The decrease reflected large drops in confidence for households aged 35 to 54 and for households earning $35,000 or more," said Ataman Ozyildirim, senior director of economics at the research group.

Although consumers have a relatively favorable view of job availability, "the outlook appears considerably more pessimistic when looking ahead," he said.
"Expectations for where jobs, incomes, and business conditions are headed over the next six months all fell sharply in February," Ozyildirim added.

And though consumers expect inflation to cool slightly, they may also be "showing early signs of pulling back spending in the face of high prices and rising interest rates," he said.

Fewer people appear to plan to buy homes, vehicles or major appliances, according to The Conference Board.

This may be welcome news to the Federal Reserve, which has been walking a fine line in trying to cool the world's biggest economy without tipping it into a recession.

Despite raising interest rates multiple times last year, policymakers are still looking for clearer signs that inflation is on a sustained downward path.

Easing consumer demand could feed into data giving the Fed more confidence to scale back its battle against inflation.

(Source: AFP)

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