Why did consumer confidence drop?
TEXT OF STORY
Kai Ryssdal: All right, so if the takeaway from today’s Case Schiller Index was mostly positive, another report wasn’t quite so rosy. The Conference Board said its Consumer Confidence Index fell almost 11 points in February to the lowest number since last April. That is the first drop in three months, and it suggests consumers aren’t quite so sure about an economic recovery thing.
But Marketplace’s Alisa Roth explains that consumers, and this number, can be oh so fickle.
ALISA ROTH: The question is: Why were consumers so nervous last month?
Ted Schmidt is an economics professor at Buffalo State College. He says the answer is simple. No jobs.
TED SCHMIDT: It’s a combination of it’s going to be a very slow, long recovery and just the disappointing job market. And people are getting disenchanted and certainly frustrated.
That seems reasonable enough. Except that until now, the consumer confidence numbers had been going up. Even though the jobs picture has been pretty sorry for awhile.
Stuart Hoffman is chief economist at PNC Financial Services Group. He says the number only counts when you have several months of data to work with.
STUART HOFFMAN: I don’t pay too much attention to monthly movements in consumer confidence. Frankly, the sentiment of consumers is more fickle than their actual behavior.
He guesses higher gas prices might’ve had something to do with this month’s drop. But he says it could’ve been anything.
Scott Hoyt follows consumer economics at Moody’s Economy.com. He says even the weather can throw it off.
SCOTT HOYT: When we have major snowstorms or blizzards that cover significant parts of the country, the Conference Board Index tends to fall hard and temporarily.
He says he can’t explain why. Just keep your fingers crossed for a quick end to the cold. Hoyt says consumer confidence doesn’t respond to other kinds of weather, not even hurricanes.
In New York, I’m Alisa Roth for Marketplace.
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