ANN ARBOR, Mich. (2/17/15)--The University of Michigan Consumer Sentiment Survey index fell 4.5 points in February to 93.6, handing back all of January's jump, which had pushed the index to an 11-year high (Economy.com Feb. 13).
Reduced optimism from consumers over current finances and a more-guarded view on future personal finances bumped the overall index lower.
"In particular, shoppers seem less certain about their prospects for a pay raise in the next year, and more households appear to be worried that bad economic times are just around the corner," said Nate Kelley, Moody's analyst (Economy.com).
The current conditions subcomponent fell 6.2 points to 103.1 in February, with a 4% drop in respondents who cited that finances had improved from last year at this time.
Further, 29% of respondents said finances were worse year-over-year, up from 27% in January.
The percentage of those who said their income is rising fell to 33% from 40% in February, and the share of those who claim higher prices are slimming down their finances increased by 1% to 14%.
Consumers expect prices to climb 2.8% over the next 12 months, a 0.3% increase from January.
"Inflation also seems to be on more buyers' minds: Shoppers see prices rising more in the next year than in the month before, most likely a result of a slight rebound in gasoline prices earlier in the month," Kelley said. "This has more people thinking their incomes won't be able to keep pace with rising prices in the coming year."