(Bloomberg) — Consumer confidence cooled in February from an 11-year high, reflecting recent gains in fuel costs and bad winter weather in parts of the U.S.
The University of Michigan final index of sentiment fell to 95.4, the first decrease in seven months. The index is down from January’s 98.1 index score, which was highest since the start of 2004. The median projection in a Bloomberg survey of 58 economists called for 94 after a preliminary reading of 93.6.
Prices at the gas pump climbed 31 cents a gallon this month and most consumers surveyed anticipate further gains, tempering optimism. Rising payrolls, low inflation and cheap borrowing costs will probably ensure Americans will sustain their spending, which accounts for about 70 percent of the economy.
“There’s been some pullback recently but the elements are there for confidence to remain quite high,” Thomas Costerg, an economist at Standard Chartered Bank in New York, said before the report. “The labor market is improving.”
The figures showed sentiment dropped 10.1 points among residents in the Northeast and 8.9 points in the Midwest, as snow piled up in those regions.
“It is hard not to attribute some of the diminished confidence to the harsh winter weather,” Richard Curtin, director of the Michigan Survey of Consumers, said in a statement. Still, “consumers continued to evaluate their financial situation as well as their future financial prospects at the most favorable levels since 2007.”
Estimates in the Bloomberg survey ranged from 93 to 97.7. The index averaged 75.5 from the start of this expansion through last month, compared with 89 in the five years before December 2007, when the last recession began.
The Michigan sentiment survey’s current conditions index, which takes stock of Americans’ view of their personal finances, dropped to 106.9 from the prior month’s 109.3 reading that was the highest since January 2007.
The measure of expectations six months from now decreased to 88 from 91.