February 25, 2022
(press release)
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Final Results for February 2022 Feb Jan Feb M-M Y-Y Next data release: Friday, March 11, 2022 for Preliminary March data at 10am ET Read our January 12th report: The Partisan Economy Read Dr. Curtin's latest paper, Nonconscious cognitive reasoning: A neglected ability shaping economic behavior.
2022 2022 2021 Change Change
Index of Consumer Sentiment 62.8 67.2 76.8 -6.5% -18.2%
Current Economic Conditions 68.2 72.0 86.2 -5.3% -20.9%
Index of Consumer Expectations 59.4 64.1 70.7 -7.3% -16.0%
Surveys of Consumers chief economist, Richard Curtin
Although Consumer Sentiment posted a slight increase in the last half of February, it still remained at its lowest level in the past decade, and the loss was still entirely due to a 12.9% decline among households with incomes of $100,000 or more. The February descent resulted from inflationary declines in personal finances, a near universal awareness of rising interest rates, falling confidence in the government's economic policies, and the most negative long term prospects for the economy in the past decade (see the chart). Virtually all interviews were conducted prior to the Russian invasion so its impact is yet to be felt by consumers. The most likely linkage to the domestic economy is through rising energy prices, with the size and length of the potential increases subject to substantial uncertainty. This will complicate the Fed's policy actions, tilting their objectives to focus more on inflation at the cost of slower growth and higher unemployment. The financial harm and growing angst among consumers about rising inflation have pushed nearly nine-in-ten consumers to anticipate interest rate hikes. The Fed's clinging to the transient hypothesis meant missed opportunities to nip inflation at its earliest stages; aggressive actions are now needed to avoid the potential establishment of an inflationary psychology that acts to form a self-fulfilling prophecy. The imposition of sanctions against Russia is likely to generate counter measures that could harm the domestic economy, requiring the Fed to give special consideration to any associated economic slowdown and rising unemployment. Presumably, economic sanctions would be lifted only if Ukraine's sovereignty is maintained, but not if Russia prevails. Consumers may double-down on precautionary behaviors if the greater cyber risks associated with the conflict are now borne by domestic households.
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