By ,
Published January 13, 2015
U.S. consumer sentiment eased in February despite some signs of improvement in the labor market, according to the University of Michigan's (search) preliminary survey released on Friday.
The University's preliminary reading of its consumer confidence index for February was 94.2, off from January's final reading of 95.5, according to market sources who saw the subscription-only report.
Analysts on average had forecast the preliminary February figure would hold steady at 95.5.
The current conditions index, however, was unchanged at 110.9, while the consumer expectations index eased to 83.4 from 85.7.
Consumer confidence is considered a barometer of consumer spending, which makes up over 60 percent of the U.S. economy. However, there has not been a strong correlation between confidence and retail sales in recent years.
The decrease in confidence came despite indications of an expanding jobs market. U.S. January non-farm payrolls rose 146,000 in data released earlier this month from 133,000 in December.
"I see (the survey) as pretty much unchanged," Steve Gallagher, U.S. chief economist with SG Corporate & Investment Banking in New York, adding "I think stronger employment numbers bode well for the Conference Board report next week. The consumer is holding steady and we're in pretty good shape."
The Conference Board's (search) reading of February consumer confidence, to be released on Feb. 22, is on average expected to ease to 103.0 from 103.4 in January.
The Treasury market showed little reaction to the University of Michigan data as prices had also come under withering fire earlier in the day by a surprise increase in the core producer price index, which excludes food and energy prices.
"The PPI would argue for [Fed Chairman Alan] Greenspan to continue to raise rates at a measured pace," said Joe Quinlan, chief market strategist at Banc of America Capital Management in New York, "but this Michigan survey tells you that the consumer might be downshifting a little bit in terms of their confidence and their spending."
Economists note that for some months it has been the expectations component that has led any decline.
https://www.foxnews.com/story/univ-of-mich-consumer-sentiment-eases-in-feb