Consumer sentiment moderates in February: survey
NEW YORK (Reuters) - U.S. consumer sentiment slipped unexpectedly in February, as concerns over unemployment and inflation led to a retreat from January's rise to a two-year high, a survey showed on Friday.
The Reuters/University of Michigan Surveys of Consumers said its preliminary February consumer sentiment index declined to 93.3 from 96.9 in January.
Analysts on average had predicted that February's reading would edge up to 97.0 but the actual result was below their lowest forecast, which was 93.5. The January reading was the highest since December 2004.
Confidence took a hit from "concerns about potential increases in unemployment, especially among lower income households and among residents of the Midwest," a statement accompanying the survey said.
Recently elevated levels of inflation also took a toll.
"The erosion of wage gains due to persistently high inflation was mentioned by half of all lower income households, twice the frequency recorded among households with incomes above the median," it added.
However, it said that data indicated personal consumption expenditures would post a gain of 3.2 percent in 2007 despite a decline in home owners cashing out equity to use on spending, although the hard-hit housing sector could remain a drag.
"While the worst of the declines may be over, the revival of the housing market will be unusually slow in developing," the statement added.
The survey's gauge of current economic conditions dipped to 108.3 in February after 111.3 in January, while its measure of consumer expectations slipped to 83.7 from 87.6 in January.
The survey's one-year inflation index held steady at 3.0 percent and its five-year inflation index dipped to 2.9 percent after having stood at 3.0 percent for three straight months.
The Reuters/University of Michigan Surveys of Consumers, a monthly series of data on U.S. consumer sentiment, are produced by the University of Michigan in Ann Arbor, Michigan. From January 2007, Reuters has exclusive rights to distribute the data.
