The preliminary February results from the University of Michigan Surveys of Consumers show overall consumer sentiment fell sharply in early February, hitting the lowest level since October 2011 (see top of first chart). The composite consumer sentiment decreased to 61.7 in early February, down from 67.2 in January, a drop of 8.2%. The index is now 19.7% below the year ago level and 36.5% below the 2018 – 2019 average.
The current-economic-conditions index fell to 68.5 from 72.0 in January (see the middle of the first chart). That is a 4.9% decrease and leaves the index with a 20.5% decrease from February 2021 and a 39.1% decline from the 2018 – 2019 average.
The second sub-index — that of consumer expectations, one of the AIER leading indicators — sank 6.7 points or 10.5% for the month, dropping to 57.4 (see bottom of first chart). The index is off 18.8% from a year ago and 34.2% from its 2018 – 2019 average.
All three indexes are now below the lows seen in four of the last six recessions (see first chart).
