Mixed Consumer Signals Reported for February

Reports on consumer confidence and actual consumer performance during the month of February seemed to point in opposite directions. On the one hand, the Conference Board's Consumer Confidence Index dropped 9.1 points in February. It stood at 87.3, down from 96.4 in January (1985 = 100). On the other hand, ShopperTrak's National Retail Sales Estimate reported that U.S. retail sales for February outpaced sales in the same month of 2003 by 17.4 percent. "Despite a slight slowdown during the final week of the month, February sales were nothing short of terrific," said Michael Niemira, chief economist and director of research for the International Council of Shopping Centers. And the Census Bureau of the U.S. Dept. of Commerce reported sales of home furnishings in the month of February 2004 were up 12.3 percent over February 2003, although down 0.4 percent from January 2004. However, Lynn Franco, director of the Conference Board's Consumer Research Center, noted, "Consumers began the year on a high note, but their optimism has quickly given way to caution. While the current [economic] expansion has generated jobs over the past several months, the pace of creation remains too tepid to generate a sustainable turnaround in consumers' confidence." Meanwhile, the University of Michigan reported a further slip in consumer confidence during the first two weeks of March.