FXstreet.com (Barcelona) - Consumer sentiment has deteriorated in the United States in February to the lowest level seen since 1992, according to the preliminary estimation of the Reuters / University of Michigan Consumer Sentiment Index.
In February, consumer sentiment index has dropped to a level of 69.6 from 78.4 in January. The current economic situation assessment has declined almost ten points in a month, to 85.4 in February from 94.4 points in January. The expectations index has deteriorated to 59.4 from 68.1 in January.
According to Ian Shepherdson, Chief U.S. Economist at High Frequency Economics, Ltd, this is the translation of the general economic slowdown into the consumer's sentiment: This is just horrible. The sustained volatility in the markets, the rise in energy and food prices and, of course, the catastrophe in the housing market, is making consumers extraordinarily miserable. The details show the expectations index - one of the 10 components of the index of leading indicators - falling to 59.4 from 68.1. This is the lowest reading since Jan 92 and, if sustained, it is consistent with real consumers' spending stalling completely.
Shepherdson adds that with such a gloomy outlook in consumption, exports will have to pull from US economy: Spending has not been that weak since H1 91. It seems increasingly likely that domestic demand will fall outright; only exports are preventing full recession, for now.