Index rebounds after January slump
US consumer sentiment showed a modest improvement in February, reflecting a somewhat brighter outlook on employment and near-term economic conditions. The Conference Board reported that its consumer confidence index rose 2.2 points to 91.2.
The increase follows a sharp drop in January, when concerns about household income and job security weighed on sentiment. Even with the latest gain, confidence remains below the high reached in November 2024.
Labor market perceptions improve
Survey responses indicate a growing share of Americans now view jobs as plentiful rather than hard to get. That shift aligns with recent labor data showing continued hiring momentum.
According to the Bureau of Labor Statistics, employers added 130,000 jobs in January. Still, total job creation so far in 2025 stands at 181,000, well below the more than 2 million positions added during 2024.
Short-term expectations for income, business conditions and employment prospects also ticked higher in February. However, that expectations index remains below 80, a threshold often associated with recession risk, for the thirteenth consecutive month.
Consumers’ assessment of current economic conditions slipped slightly, declining 1.8 points to 120.
Persistent inflation concerns
Despite improving labor market perceptions, high prices continue to weigh on sentiment. Write-in responses reflected ongoing unease about inflation and the cost of goods.
Consumers’ 12-month inflation expectations were largely unchanged but remain elevated. Mentions of trade and political issues increased, while references to labor market weakness eased somewhat.
Spending intentions show mixed picture
The February survey found that more consumers plan to make major purchases over the next six months, particularly used cars, furniture, televisions and smartphones.
Home-buying intentions were broadly steady. The housing market, typically quieter at this time of year, continues to face headwinds after a prolonged slowdown.
