U.S. consumer confidence fell more sharply than expected in February as Americans took a dimmer view of the economy mainly because of a dearth of new jobs, a report published Tuesday said.
The Conference Board, a private research firm, said its index of consumer confidence dropped to 87.3 in February from a downwardly revised 96.4 in January. Economists had forecast a drop to 92.5. February's reading was the lowest since October.
"People are not happy. The big problem is the jobs situation. The lack of jobs has people scared," said David Wyss, chief economist at Standard & Poor's in New York. "When people are scared they don't spend money, and the consumer has been the mainstay of this economy."
At the same time, people's spending tends to be more influenced by their income than by their confidence, he added.
Indeed, even as the Conference Board's report showed confidence in the economic outlook wavering, two reports earlier on Tuesday on chain-store sales showed that consumer spending remained healthy.
The International Council of Shopping Centers and investment firm UBS reported that sales at U.S. chain stores fell 0.2% in the week ended Feb. 21, though in a year-over-year comparison, sales climbed to their best level in nearly five years.
The second report from research group Redbook said that the Presidents Day holiday helped increase U.S. chain-store sales, especially for department stores, by 5.6% on a year-over-year basis for the week ended Feb. 21. February sales were up 1% compared with January, Redbook said.
In the confidence report, the number of consumers saying that jobs were hard to get rose in February to 32.1%, up from January's 31.6%.
Consumers' view of the future also deteriorated, taking the expectations index down to 96.8 from 107.8, while the present-situation index declined to 73.1 from 79.4.