US consumer confidence fell much more than expected in February, according to survey data published Tuesday, as respondents voiced concern about the US political environment ahead of high-stakes elections this year.
The fall in consumer confidence could cause concern for President Joe Biden’s administration, which has been looking to highlight US economic strength ahead of the Democrat’s likely rematch in November against Republican Donald Trump.
Despite data showing falling inflation, strong growth and a surprisingly resilient labor market, public perception on the economy has proven to be an ongoing challenge.
Consumer confidence slipped to 106.7 in February, the Conference Board said in a statement, while last month’s figure was reduced to 110.9.
The February data was well below market expectations of 114.6, according to Briefing.com.
The survey responses “revealed that while overall inflation remained the main preoccupation of consumers, they are now a bit less concerned about food and gas prices,” Conference Board chief economist Dana Peterson said in a statement.
“But they are more concerned about the labor market situation and the US political environment,” she added.
The drop in consumer confidence was broad-based, affecting most income groups, as well as among people under 35 years old and those aged 55 and over, according to Peterson.
It wasn’t all bad news though, as the average 12 month inflation expectations continued to decline, edging down slightly to 5.2 percent in February from 5.3 percent a month earlier, according to the Conference Board.
“The retrenchment in confidence in February followed gains in the prior three months,” High Frequency Economics chief US economist Rubeela Farooqi wrote in a note to clients.
“It is not clear that an improving trend in recent months will reverse on a sustained basis going forward,” she added.
