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U.S. consumers' mood sours in Feb-survey

Published 02/27/2009, 09:55 AM
Updated 02/27/2009, 09:56 AM

By Burton Frierson

NEW YORK, Feb 27 (Reuters) - U.S. consumer confidence fell to a three-month low in February on expectations that the recession would grind on throughout this year and the jobless rate will keep rising, a survey showed on Friday.

The Reuters/University of Michigan Surveys of Consumers said its final index reading of confidence for February fell to 56.3 from 61.2 in January.

That was marginally higher than the preliminary result of 56.2 announced earlier this month but was the lowest final reading since 55.3 in November 2008.

"Confidence remained unchanged at the same low level recorded at mid-month as consumers found no reason to expect that the recession would end during 2009 and reported record declines in their personal finances and job prospects," the report said.

"Moreover nearly two-thirds of all consumers thought it would be at least five years before the full restoration of favorable economic conditions."

The index's headline number did manage to beat economists' median expectation for a reading of 56.0, which was based on 49 forecasts in a Reuters poll that ranged from 52.0 to 57.0.

Ultimately, sentiment remains severely depressed and is not far from the record low of 51.7 that it hit in May 1980. The University of Michigan confidence index dates back to 1952.

Reflecting the grim mood, the index measuring consumers' view of the 12-month economic outlook fell to its lowest since 1980, when the economy was struggling through the stagflation period of shrinking economic activity and rising prices.

The 12-month economic outlook index fell to 31 in February from January's 47. The only consolation was that this was not as bad as the preliminary reading of 27, which would have been the lowest ever.

One-year inflation expectations fell to 1.9 percent from January's 2.2 percent. That was the lowest in two months but not as weak as the 1.6 percent recorded in the mid-month report.

However, five-year inflation expectations rose to 3.1 percent -- their highest since August 2008 -- from January's 2.9 percent. (Editing by James Dalgleish)

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