Consumer confidence slips in February

Don Hogsett, March 4, 2002

With Americans growing modestly more unsettled about the job market and their income prospects, consumer confidence slipped by 3.8 percent in February to a reading of 94.1 (1985=100), The Conference Board reported.

Despite the modest slippage, the outlook remains solid for consumer spending — the main driver of the U.S. economy — and buying plans held relatively steady during the month, the business think tank reported.

After putting up hefty gains over the previous two months, the bellwether measure of consumer sentiment gave up some ground in February, with the index slipping almost 4 percent from 98.1 in January. "While confidence has weakened from January's level, both components of the Index still point to healthy consumer spending in the months ahead," said Lynn Franco, director of The Conference Board's Consumer Research Center. "The consumer will continue to provide solid spending support as the economy moves into recovery."

Two key spending signals moved up during the month, as more consumers said they plan to buy cars and major appliances. But home-buying plans dipped slightly after a strong run-up late in 2001. The Conference Board canvass indicated that 7.9 percent of consumers plan to buy a new car during the next six months, up from 7.6 percent the previous month. And 27.8 percent plan to buy a major appliance — like a washing machine or air conditioner — up from 27.7 percent in January. Only home-buying plans lost some ground, declining to 3.8 percent from 4.0 percent the preceding month.

Consumers were somewhat more skittish about current business conditions in the February canvass, with the number rating conditions as "good" declining to 17.2 percent from 18.2 percent in January. And those defining current conditions as "bad" rose marginally, to 22.9 percent from 22.4 percent a month ago.

Assessing the jobs outlook, 17.8 percent said jobs are plentiful, down slightly from 18.4 percent in January. Correspondingly, the number who find jobs "hard to get" edged up to 22.8 percent from 22.5 percent. The number expecting more jobs to become available in the next six months backed off slightly, to 18.4 percent from 18.9 percent a month ago.

Consumer confidence by region

Region % Change
New England +7.8%
Middle Atlantic -10.9
East North Central -10.1
West North Central -10.9
South Atlantic -1.4
East South Central +0.7
West South Central -0.4
Mountain -9.3
Pacific +8.4

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