US consumer sentiment declines for first time in three months

The current conditions gauge fell last month to 79.4 and a measure of expectations dropped to 75.2 from January. (Representative Image)

US consumer sentiment fell in February for the first time in three months as current and expected views of the economy deteriorated.

The sentiment index declined to 76.9 from 79 in January, according to the final February reading from the University of Michigan. The figure was lower than all estimates in a Bloomberg survey of economists.

Consumers expect prices will climb at an annual rate of 3% over the next year, up from the 2.9% expected in January, data Friday showed. They see costs rising 2.9% over the next five to 10 years, unchanged from the prior month.

Despite the drop, sentiment has largely been improving in the last two years as inflation has retreated without much damage to the economy. Also, consumers’ outlook tends to be sensitive to changes in gasoline prices, which rose markedly last month.

“Consumers perceived few changes in the state of the economy since the start of the new year, and they appear to be assured that inflation will continue on a favorable trajectory,’’ Joanne Hsu, director of the survey, said in a statement.

The change in sentiment in February differed by political affiliation. Views among Republicans improved to the best level since mid-2021. Those for Democrats worsened by the most since June 2022 but remained elevated, especially compared to the other party.

The current conditions gauge fell last month to 79.4 and a measure of expectations dropped to 75.2 from January. Buying conditions for durable goods eased, as did consumers’ expectations for their personal finances.