The consumer's mood is definitely downbeat, a strong indication that the jobs market isn't improving. The Conference Board's consumer confidence index fell back in a surprising and sizable way, down nearly 10 points to 46.0 in February (January revised to 56.5). Expectations, the index's leading component, fell more than 13 points to 63.8 reflecting a sweeping sentiment downturn in income, employment, and business conditions. The expectations index never really got going last year, barely approaching the watershed 80 level, a level consistent in the past with economic expansion.
The trouble in expectations signaled trouble for the present-situation component which dipped into the teens and toward the record lows of the early 80s. The index fell nearly 6 points to 19.4, reflecting pessimism over current business conditions where only 6.2 percent of the 3,000-home initial sample describe them as good. Only a miniscule 3.6 percent describe jobs as currently plentiful with 47.7 percent, up 1.2 percentage points from January, describing them as hard to get. This latter reading, which gets a lot of attention, will raise talk of trouble for February's jobs report.
Let's take a look at the data:
Note that after bottoming, confidence rose to the 55-60 level, and has stayed there for the better part of a year. The main issue here is jobs. While the employment picture is improving (job losses are near 0), we're not seeing the type of job gains associated with an expansion. In addition, there are certain segments of the employment market that have taken it on the chin in this recession (think manufacturing and construction and lower educated employees). As a result, there is reason to be concerned certain segments of the jobs market won't be coming back (which they probably aren't). And that has people concerned for good reason.
