Americans' outlook on the economy continued to erode as the Conference Board's Consumer Confidence Index hit a 15-year low in February. The Board's Index now stands at 75, down from 87.3 in January, while the expectations index also feel to 57.9 from 69.3.
"The Consumer Confidence Index continues losing ground and, with the exception of the Iraqi War in 2003, is now at its lowest level in nearly 15 years," said Lynn Franco, director of The Conference Board Consumer Research Center. "The weakening in consumers' assessment of current conditions, fueled by a combination of less favorable business conditions and a sharp rise in the number of consumers saying jobs are hard to get, suggests that the pace of growth in early 2008 has slowed even further."
Consumers' appraisal of present-day conditions weakened significantly in February. Those claiming business conditions are "bad" increased to 21.8% from 20.1%, while those claiming business conditions are "good" declined to 18.5% from 20.6%. Consumers' assessment of the job market was considerably more pessimistic than last month. Those saying jobs are "hard to get" rose to 23.8% from 20.6%, while those claiming jobs are "plentiful" decreased to 20.6% from 23.8%.
"Consumers' expectations are now at a 17-year low," Franco said. "With so few consumers expecting conditions to turn around in the months ahead, the outlook for the economy continues to worsen and the risk of a recession continues to increase."
Consumers' short-term expectations also deteriorated considerably in February. Consumers expecting business conditions to worsen over the next six months increased sharply to 21.4% from 16.3%, while those anticipating business conditions to improve declined to 9.5% from 11.5% in January.
The outlook for the labor market was also significantly more pessimistic. Those expecting fewer jobs in the months ahead surged to 27.9% from 21.9%, while those anticipating more jobs declined to 9% from 10.5%. The proportion of consumers expecting their incomes to increase declined to 17% from 18.1%.