US Consumer Sentiment Unchanged in February: Reuters/University of Michigan
US consumer confidence steadied in February, as Americans remained generally optimistic amid a broad, weather-induced slowdown in the economy.
A broad gauge of consumer sentiment, courtesy of Thomson Reuters and the University of Michigan, was unchanged at 81.2 in February. Economists in a Reuters poll forecast a narrow drop to 80.6.
A weaker appraisal of the current situation tempered the sharpest rise in consumer expectations in six months, survey data showed. The survey’s gauge of current economic conditions weakened from 96.8 to 94, while the barometer of consumer expectations increased from from 71.2 to 73.
“The good news is that confidence proved resilient to recent government reports of weak growth in income and employment,” wrote Richard Curtin, the survey director. “The not-so-good news is that the full impact on household budgets from the harsh winter has yet to be registered.”
Higher demand for heating during the colder than normal winter will probably result in more expensive heating bills in the months ahead, Curtin added. This means households already struggling with higher social security taxes and weaker earnings growth could face another squeeze to their budget.
A separate report today from the Federal Reserve showed higher demand for heating boosted the utilities industry by 4.1 percent in January, amid broader declines in manufacturing and mining. Economists believe frigid temperatures across the country weakened the pace of hiring and consumer spending last month. The Commerce Department reported yesterday that retail sales declined 0.4 percent in January.
With consumer sentiment holding still in February, spending could pick up once the frigid temperatures begin to moderate. The colder than normal winter dumped heavy amounts of snow over the Midwestern and eastern United States in December and January.
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