Consumer confidence across the U.S. fell more in February than forecast as the elation over dropping fuel prices waned and many Americans lost optimism over prospects for income and employment.
The Conference Board sentiment index fell from a 103.8 revised reading for January, to 96.4. January’s reading was the highest since August of 2007, said the research group based in New York. Economists had projected the index drop to 99.5.
A recent uptick in the price of gasoline from a low of six years might be curbing some of the enthusiasm of households after plunging prices in 2014 and an increase in hiring boosted confidence.
Further labor market improvement that propels larger increases in pay will be necessary to support consumer sentiment through the year.
On Tuesday, another report showed that prices of homes in 20 cities in the U.S. appreciated at their fastest pace in the year ended December 31. That is a sign that the limited supply is pushing up the property values.
Stocks were up as Janet Yellen the Chair of the Federal Reserve signaled that change in the guidance by the central bank on interest rates would not lock it into any timetable for increasing the rates.
The gauge by the Conference Board of the present conditions fell in February to 110.2 from January’s 113.9. The number of Americans who said conditions for business were good fell to 26% from last month’s 28.2%.
The index for U.S. consumer expectations for the upcoming six months was down from January’s 97 to 87.2 in February. The slump of 9.8 points was the largest drop since a shutdown of the federal government in October of 2013.
Data from the group has shown that the assessments by Americans of current as well as future labor-market conditions have deteriorated. The share, which shows that jobs were hard to find currently, was up from 24.6% to 26.2% in February.
The proportion of Americans expecting there to be more jobs available over the upcoming six months fell from 17.3% to 13.4% its lowest since November of 2013.