Consumer Sentiment Falters, Despite Job Growth

Americans turned less optimistic about the economy in early February on worries about falling income even as their outlook on the jobs market rose to a record high, a survey released on Friday showed.

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"Most analysts thought consumer confidence would lose steam in February after the CB's CCI fell in January," said Vimombi Nshom, an economist at IFR economics.

The Thomson Reuters/University of Michigan Index of Consumer Sentiment fell back in February with a preliminary score of 72.5 that is 2.5 pts lower than January's score of 75.

Current conditions, and more precisely a negative tone towards current finances, was the heaviest drag. Even though optimism towards the job market kept up, the CSI was unable to hang on to sentiment expressed last month. Market expectations averaged to 74.5.

"While both components slipped in early February, the larger fall occurred within Current Conditions, down to 79.6 from 84.2," added Nshom. 

The loss of 4.6 pts puts this measure back to its December level. Only 23% of respondents reported an improved financial situation (which is down from the 29% recorded last month) and 25% of households said their incomes had declined.