US Consumer Confidence Declines in February Despite Hopes for Additional Stimulus By Reuters

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WASHINGTON (Reuters) – American consumer confidence unexpectedly fell in early February amid growing pessimism about the economy among households with annual incomes below $ 75,000, even as the government is poised to hand over another round of $ 75,000 cash. help from COVID-19. The University of Michigan said Friday that its consumer sentiment index fell to 76.2 in the first half of this month from a final reading of 79 in January. Economists polled by Reuters had forecast that the index changed little to 80.8. “More surprising was the finding that consumers, despite the expected passage of a massive stimulus bill, viewed the outlook for the national economy less favorably in early February than last month,” said the University of Michigan it‘s a statement. President Joe Biden proposed a $ 1.9 trillion recovery package, which is being considered in the US Congress. The government provided nearly $ 900 billion in additional aid for the pandemic in late December. US financial markets were little affected by the data. The survey’s measurement of current economic conditions fell to a reading of 86.2 this month from 86.7 in January. Its gauge of consumer expectations fell to 69.8 from 74.0 in January, attributed entirely to households with incomes below $ 75,000. “Households with incomes in the bottom third reported significant setbacks in their current finances, and fewer of these households mentioned recent income gains than at any time since 2014,” said the University of Michigan. “Among those with income in the bottom third, only 23% reported financial improvement, the lowest since 2014. In contrast, among those with income in the top third, 54% reported that their finances had improved.” Consumers also appeared to anticipate higher inflation in the short term. The one-year inflation expectations of the survey increased to 3.3% from 3.0%. But its five-year inflation outlook was unchanged at 2.7%.

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