Consumer sentiment sags to six-month low in February as lower-income Americans grow more pessimistic

Consumer sentiment sags to six-month low in February as lower-income Americans grow more pessimistic

The numbers: Pessimism about financial security, especially among lower-income Americans, grew in early February and fewer expect the economy to show much improvement by the summer, a new survey showed.

The first of two readings of consumer sentiment this month fell 3.5 points to 76.2 in early February and touched a six-month low, according to an index produced by the University of Michigan. The index registered 79 in January.

Economists polled by Dow Jones and The Wall Street Journal had forecast the index would creep higher to 80.8.

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What happened: The attitude of Americans right now about their own personal finances and the broader economy was basically unchanged. The so-called index of current conditions edged down to 86.2 from 86.7 in January.

Hopes for a stronger economy later in the year dimmed, however. A forward-looking gauge on what consumers expect six months from sank to 69.8 from 74 last month. That’s also the weakest reading in six months.

The overall consumer sentiment index is still more than 20 points below its precrisis peak, however.

Read: Are 20 million Americans really getting unemployment benefits? Don’t take it at face value

Big picture: The economy sputtered toward the end of last year after the record rise in coronavirus cases, but it’s still expanding. Growth is expected accelerate later this year as more Americans get vaccinated, Covid cases decline and Washington pumps more federal aid into the economy.

The Democratic-led Congress is on track to pass nearly $2 trillion in additional stimulus in the next month or so.

Read: Rising inflation is no threat to the U.S. economy – or is it?

Market reaction: The Dow Jones Industrial Average

fell and S&P 500

rose slightly in Friday trades. The sentiment report

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