US consumer sentiment ebbs in February

14 February, 2021 12:00 AM printer

WASHINGTON: US consumer sentiment 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 deliver another round of COVID-19 relief money.

The University of Michigan said on Friday its consumer sentiment index slipped to 76.2 in the first half of this month from a final reading of 79 in January. Economists polled by Reuters had forecast the index little changed at 80.8, report agencies.

“More surprising was the finding that consumers, despite the expected passage of a massive stimulus bill, viewed prospects for the national economy less favorably in early February than last month,” the University of Michigan said in a statement.

President Joe Biden has proposed a $1.9 trillion recovery package, which is under consideration in the U.S. Congress. The government provided nearly $900 billion in additional pandemic relief in late December.

U.S. financial markets were little moved by the data.

The survey’s measure of current economic conditions dipped to a reading of 86.2 this month from 86.7 in January. Its gauge of consumer expectations dropped 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, with fewer of these households mentioning recent income gains than anytime since 2014,” the University of Michigan said.