Consumer sentiment in the U.S. has deteriorated by more than expected in the month of February, according to a report released by Reuters and the University of Michigan on Friday, with the drop largely reflecting a more negative assessment of current economic conditions.
The report showed that the consumer sentiment index dropped to a reading of 72.5 in February from January's final reading of 75.0. Economists had been expecting the index to edge down to 74.8.
The bigger than expected drop by the consumer sentiment index comes after it reached an eleven-month high in January.
The current economic conditions index showed a notable decrease, sliding to 79.6 in February from 84.2 in the previous month.
Meanwhile, the consumer expectations index showed a more modest drop during the month, edging down to 68.0 in February from 69.1 in January.
Peter Boockvar, equity strategist at Miller Tabak said, "Bottom line, confidence gave back half the jump seen in January, but at 72.5 is still the 2nd best reading dating back to last May as the labor market has shown signs of continued improvement."
On the inflation front, the report showed that one-year inflation expectations edged down to 3.2 percent from 3.3 percent, while five-year inflation expectations rose to 2.9 percent from 2.7 percent.
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