Consumers are feeling less optimistic than expected so far this month as they weigh inflation rates and the pace of wage gains, a survey said Friday.
The Index of Consumer sentiment hit 90.7 in February's preliminary reading, according to estimates by the University of Michigan. Analysts expected a reading of 92, down from January's preliminary 93.3 and even with January's final reading of 92, according to Thomson Reuters consensus estimates.
"While slowing economic growth was anticipated to slightly lessen the pace of job and wage gains, consumers viewed their personal financial situations somewhat more favorably due to the expectation that the inflation rate would remain low for a considerable period of time," the survey's chief economist, Richard Curtin, said in a statement.
A closely-followed barometer of economic health, the survey measures consumers' attitudes toward current economic conditions and future expectations. Both edged downward for the month, though Curtin said a less favorable outlook for the economy during the year ahead was balanced by steady longer term prospects.
Consumers' assessment of current economic conditions ticked down slightly to 105.8, from 106.4 at the end of January. The index of future expectations dropped to 81 from 82.7.
February's falling consumer sentiment came despite retail sales gaining momentum in January, spurred by a stronger labor market, Reuters reported from separate data.
"No one would have guessed forty years ago, when high inflation was the chief cause of pessimism, that consumers would someday base their optimism on ultra-low inflation transforming meager wages into real income gains," Curtin said.
What are the markets doing? Check here.
—Reuters contributed to this report.