Recent surveys carried out in the US indicate that the consumer confidence index has been declining.
The Conference Board revealed in a report released on Tuesday claiming that the consumer confidence in the US had declined by a larger than the anticipated margin in February. The Conference Board claims that the confidence index dropped from 97.8 in January to 92.2 in January. Economists had predicted that it would fall to 97.2 from the 98.1 recorded in the previous month.
The data presented by the board indicates that the consumers’ assessment of current conditions in February has been declining. The present situation index has dropped from 116.6 in January to 112.1 in February. The same also happened to the customers’ appraisal of the labor market because it declined from 23% in January to 21.1% in February. The number of people claiming that jobs are hard to come by in January was 23% while those saying the same in February are 24.2%.
Consumers who believed that business conditions were good at the beginning of the year were 27.7% while those who currently believe the same are 26%. Those claiming that business conditions are unattractive increased from 18.8% in January to 19.8% currently. The board also claims that the expectations index declined to 78.9 this month compared to 85.3 during the beginning of the year. This means consumers have adopted a more pessimistic point of view over the short run.
In other news, the labor department released a report indicating that unemployment benefits have decreased from 269,000 to 262,000 over a period of three months, and registered the lowest numbers at 260,000 during the last week of November. The Labor Department also revealed that the four-week moving average also dropped to273,250 from the previous week’s moving average of 281,250, thus registering a decline of 8,000.
As a result, Stanley Fischer, the vice chairman of the Federal Reserve Board suggested that the employment target should be overshot to encourage higher inflation. He made the suggestion during his speech at the IHS Energy CERA Week conference held in Houston.