2/28/2025: Consumer Confidence
- Consumer confidence fell sharply in February, registering its sharpest monthly decline since August 2021, amid inflation fears
- But gloomier attitudes don’t usually lead to a pullback in spending, according to economists. For instance, in June 2022, when consumer sentiment plunged to a record low as inflation reached a four-decade high, American shoppers continued to spend in the following months
- Consumer spending accounts for about 70% of the US economy, and retail sales account for about a third of overall spending. So if Americans continue to spend at a healthy pace, there is likely no recession taking shape
- The better correlation with spending is with consumer income and the overall health of the job market
- America’s job market overall remains in good shape, with unemployment at 4% and average hourly earnings continuing to grow, Labor Department data shows
