Consumer confidence in the US plummeted in early February as economic sentiment remained low among families with annual incomes below $ 75,000, despite expectations of additional fiscal stimulus.
The University of Michigan consumer confidence index fell to 76.2 in the first half of the month, from a final reading of 79 in January.
Analysts consulted by Reuters expected the figure to be 80.8.
“What was most surprising was the discovery that consumers, despite the expected approval of a massive stimulus bill, viewed the national economic outlook less favorably in early February than last month,” the university said in a statement.
The gauge of current economic conditions also decreased to a reading of 86.2 this month from 86.7 in January. The Consumer Expectations Index fell to 69.8 from 74.0 in January, a decline fully attributable to households with incomes below $ 75,000.
“Households with incomes in the lower third reported significant setbacks in their current finances (…) among which only 23% reported a lower financial improvement (percentage) since 2014. In contrast, among those with incomes in the upper third, 54% reported that their financial condition had improved, “the University of Michigan said.
For his part, Richard Curtin, chief economist in charge of the university study, said that “the entire loss of profits is concentrated in the component of the index that measures consumer expectations for the next six months, which fell to 69.8 points. End of December “.
On the other hand, unemployment remained at high levels in January. The Fed noted that the economy had 10 million fewer jobs in early 2021 compared to the same period last year.
“Households in the bottom third of income recorded a significant decline in their current financial position,” the expert added.