Consumer Confidence Index Slowing

There is a tangible slowing in the consumer confidence index, to 92.2 in February vs January's downward revised 97.8. Readings are broadly lower but only slightly lower for the most closely watched detail of the report which is jobs hard to get, rising 6 tenths to 24.2 percent which is still a very low reading and isn't convincing enough to point to a rise in the unemployment rate.

Other readings show slightly more erosion but nothing dramatic. Income expectations are still positive but slightly less so as are expectations for business conditions. Expectations for the jobs market have been on the pessimistic side in this report and slightly more so in today's report.

Buying plans are mostly lower especially for housing which won't give a boost to what is no more than a moderate housing outlook. And in another sign of weakness, inflation expectations continue to tick lower, down 1 tenth for the fourth straight decline to a 4.7 percent rate which for this reading is very low.

FOMC policy makers have been reluctant to downgrade inflation expectations but today's report is more evidence that low oil prices and low prices for imports are more and more evident to the consumer. Most confidence readings have been holding up better than today's report which may suggest that it is a downside outlier. Watch for the consumer sentiment report on Friday's calendar which is expected to firm slightly from mid-month.

Recent History Of This Indicator:
Despite this year's stock market losses and talk of global recession, consumer spirits have been surprisingly steady. But the consumer confidence index is expected to edge lower in the February report with the Econoday consensus at 97.2 vs 98.1 in January. Earlier readings this month from the consumer sentiment and consumer comfort reports softened but only slightly. Note that assessments of the jobs market in the consumer confidence report are always very closely watched as leading gauges for the monthly employment report.