U.S. Consumer Sentiment Drops Less Than Initially Estimated In February

(RTTNews) - With revised data showing an uptick in the assessment of current conditions, the University of Michigan released a report on Friday showing that U.S. consumer sentiment deteriorated by much less than previously estimated in February.

The report showed that the final reading on the consumer sentiment index for February came in at 91.7 compared to the preliminary reading of 90.7.

The upwardly revised reading still came in below January's 92.0, although it exceeded economist estimates for an upward revision to 91.0.

The better than expected reading on the headline index came as the current economic conditions index for February was upwardly revised to 106.8 from 105.8 and is now slightly above 106.4 in January.

The index of consumer expectations for February was also upwardly revised to 81.9 from 81.0, but it is still down from 82.7 in the previous month.

Richard Curtin, the survey's chief economist, said, "Although consumers are not as optimistic as at the start of last year, the Sentiment Index is just 6.5% below the cyclical peak of 98.1 set in January 2015."

"Needless to say, the current decline of just 6.5% hardly merits a recession warning, although it does indicate a somewhat slower expansion in consumer expenditures - to 2.7% in 2016, down from 3.1% in 2015," he added.

On the inflation front, one-year inflation expectations held at 2.5 percent, while five-to-ten year inflation expectations fell to 2.5 percent in February from 2.7 percent in January.

The Conference Board released a separate report earlier this week showing a much bigger than expected drop in consumer confidence in February due to turmoil in the financial markets.

The association's consumer confidence index tumbled to 92.2 in February from a downwardly revised 97.8 in January, while economists had expected the index to dip to 97.2.