U.S. consumer confidence fell seven points in February, the steepest monthly decline in four years in the Conference Board's Consumer Confidence Index. Vacation spending as a priority is trending downward.
The Conference Board said the seven-point drop from January to February was the index's sharpest decline since August 2021. The dive was seen across all age groups, but the steepest was observed among individuals ages 35 to 55.
Stephanie Guichard, senior economist of global indicators at the Conference Board, said this was the third consecutive month of decline.
"Of the five components of the index, only consumers' assessment of present business conditions improved, albeit slightly," Guichard said. "Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a ten-month high."
The Conference Board found that consumers' overall purchase intentions in the months ahead had changed little, but that their priorities had shifted slightly: personal and healthcare as well as movies and live entertainment moved up the priority list at the expense of streaming and travel. Vacation spending began trending downward in December and continued in January, according to the Conference Board.
Bullishness about the stock market also fell this month, with 46.8% of consumers expecting stock prices to increase this year, down from 54.2% in January; 32.8% expected stock prices to decline.
A surge in expectations for inflation, from 5.2% to 6%, likely reflects the jump in prices of household staples like eggs and the expected impact of tariffs, Guichard said.
"References to inflation and prices in general continue to rank high in write-in responses, but the focus shifted toward other topics," she said. "There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019. Most notably, comments on the current administration and its policies dominated the responses."