U.S. Consumer Confidence Slips

• U.S. consumer confidence fell to a five-month low in February, with fewer consumers planning to purchase homes, automobiles and go on vacation over the next six months amid concerns about the short-term economic outlook. 
• The survey from the Conference Board on Tuesday also showed consumers' inflation expectations rising after moderating for two straight months. But with the labour market rapidly churning out jobs and COVID-19 cases subsiding, the second straight monthly decline in confidence and drop in buying intentions likely do not signal a major slowdown in consumer spending. 
• Retail sales surged in January even as confidence ebbed. Consumers accumulated more than $2.0Tn in excess savings during the pandemic, which should help to underpin spending. 
• The Conference Board said its consumer confidence index dipped to a reading of 110.5 this month, from 111.1 in January. This is the lowest since last September 2021 and the index remains above its pandemic lows. 
• The survey's measure of current conditions improved, likely because of declining coronavirus infections that were driven by the Omicron variant. Its gauge of expectations for growth in the short term fell to a five-month low, suggesting a cooling in growth in the first half of the year. But the slowdown will probably be modest, with business activity regaining speed in February as the drag from the Omicron surge diminishes.

(Source: Reuters)