US Consumer Confidence Improves in February; Cloud Over Labor Market Remains

 US Consumer Confidence Improves in February; Cloud Over Labor Market Remains

**Published: February 26, 2026**

You know that feeling when you get a slightly better bill than you expected? Not great, but better than you feared?

That's pretty much where American consumers are right now.

Consumer confidence ticked up in February, according to fresh data from the Conference Board. The headline index rose to 91.2, beating economists' expectations of 88.0 and climbing from January's upwardly revised 89.0 .

But here's the thing about this number—it's still well below where we were just over a year ago. The four-year peak of 112.8 from November 2024 feels like a distant memory .

And underneath that modest improvement, there's a persistent worry that won't go away: the job market.

Let me walk you through what the latest consumer confidence data actually tells us, why the labor market remains a concern, and what this means for your wallet and your work.

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## The Short Version

**What happened:** The Conference Board's Consumer Confidence Index rose to 91.2 in February, up from 89.0 in January and beating expectations of 88.0 .

**Why it improved:** Consumers' expectations for the future got less pessimistic. The Expectations Index jumped to 72.0 from 67.2 .

**What's still worrying:** The Present Situation Index actually declined to 120.0 from 121.8, showing consumers feel worse about current conditions .

**The labor market cloud:** Despite some improvement in job expectations, workers remain anxious. Mentions of labor market issues eased slightly but are still elevated, and other surveys show persistent concerns about job security and income .

**The inflation angle:** Prices remain top of mind. Comments about inflation and the cost of goods continued to dominate consumers' write-in responses .

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## The Two Surveys: Why They Tell Different Stories

Before we dive into the numbers, it helps to understand that there are actually two major consumer confidence surveys, and they sometimes point in slightly different directions.

**Table 1: February 2026 Consumer Confidence Surveys Compared**

| **Measure** | **February Reading** | **Change from January** | **What It Measures** |

| :--- | :--- | :--- | :--- |

| Conference Board CCI | 91.2 | +2.2 points | Employment-focused, larger sample |

| Univ. of Michigan CSI | 56.6 | +0.2 points | Household finances-focused, more detailed |

*Sources: *

The Conference Board index is more influenced by employment and labor market conditions from the worker's perspective. The Michigan index focuses more on household finances and the impact of inflation .

Most economists view the Michigan index as a better leading indicator of future consumer spending—it's more attuned to "pocketbook issues" like gas prices. The Conference Board index tends to be better at picking up on lagging labor indicators related to the job market and job security .

Both improved in February, but the Michigan index actually came in below expectations, rising to just 56.6 versus the 57.3 economists had forecast .

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## What the Conference Board Numbers Actually Say

Let's dig into the details of the Conference Board report, because the headline number only tells part of the story.

### The Headline Index: Better, But Not Good

The Consumer Confidence Index rose to 91.2 in February. That's an improvement, but context matters.

**Table 2: Consumer Confidence Index History**

| **Period** | **CCI Reading** | **Context** |

| November 2024 | 112.8 | Four-year peak  |

| January 2026 | 89.0 (revised) | Post-holiday slump |

| February 2026 | 91.2 | Modest rebound |

| **Change from peak** | **-21.6 points** | Still significantly below |

**Dana Peterson**, chief economist at The Conference Board, put it this way: "Confidence ticked up in February after falling in January, as consumers' pessimistic expectations for the future eased somewhat. Four of five components of the Index firmed. Nonetheless, the measure remained well below the four-year peak achieved in November 2024 (112.8)" .

### The Expectations vs. Present Situation Split

Here's where it gets interesting. The improvement was driven entirely by expectations for the future, not how people feel right now.

- **Expectations Index:** Shot up to 72.0 from 67.2 in January .

- **Present Situation Index:** Actually fell to 120.0 from 121.8 .

What does this mean? Consumers are slightly less gloomy about where things are headed, but they feel worse about their current circumstances. That's a mixed signal at best.

### What Consumers Are Actually Saying

The write-in responses are often more revealing than the hard numbers.

Peterson noted that "consumers' write-in responses on factors affecting the economy continued to skew towards pessimism. Comments about prices, inflation, and the cost of goods remained at the top of consumer's minds" .

She also highlighted that "mentions of trade and politics also increased in February," while "labor market mentions eased a bit" .

So inflation is still the dominant concern, but it's not alone. Trade policy and political uncertainty are creeping higher on people's worry lists.

## The Michigan Survey: A Slightly Different Picture

The University of Michigan's survey, released a few days earlier, told a similar but subtly different story.

### The Headline Number

The Michigan Consumer Sentiment Index rose to just 56.6 in February, up marginally from 56.4 in January but well below the 64.7 recorded a year earlier . Economists had expected 57.3, so the actual reading was a disappointment .

**Joanne Hsu**, director of the University of Michigan Surveys of Consumers, offered a sobering assessment: "The persistence of these trends highlights consumers' continued frustration with high prices even as their worries about future inflation have softened. Sentiment is about 13 percent below a year ago and more than 20 percent below January 2025" .

### The Income and Prices Story

The Michigan survey drilled deeper into how households are feeling about their finances.

**Table 3: Michigan Survey Key Findings**

| **Indicator** | **Finding** |

| :--- | :--- |

| High prices impact | ~46% of consumers mentioned high prices eroding personal finances  |

| Income concerns | ~23% spontaneously mentioned lower incomes as a drag on finances—second highest since 2021  |

| Inflation expectations (1-year) | 3.4%, down from 4% in January  |

| Inflation expectations (5-year) | 3.3%  |

The 46% figure on high prices is particularly striking. It marks the seventh consecutive month that this reading has exceeded 40% . That's a lot of people feeling squeezed at the grocery store and the gas pump.

### The K-Shaped Recovery

One of the most interesting findings from the Michigan survey is the divergence between different groups of consumers.

Hsu noted that consumers with higher incomes and better asset holdings are feeling more resilient. They have stronger income prospects and more robust investment portfolios to weather economic uncertainty .

Lower-income groups? Not so much. Their confidence remains constrained by high prices and the cost of living .

This "K-shaped" recovery—where some groups bounce back while others fall further behind—has been a persistent theme since the pandemic, and it shows no signs of disappearing.

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## The Labor Market Cloud: Why Workers Are Still Worried

Despite the modest improvement in consumer confidence, the labor market remains a significant source of anxiety.

### What the Confidence Surveys Show

The Conference Board noted that "labor market mentions eased a bit" in February, but that's a low bar . The Michigan survey found that "overall views of labor markets also remain considerably cooler than a year ago" .

### The NY Fed Survey: A Mixed Picture

The Federal Reserve Bank of New York's January Survey of Consumer Expectations offered some encouraging signs alongside persistent concerns .

**Table 4: NY Fed Labor Market Expectations (January 2026)**

| **Measure** | **Change** | **Current Level** | **Context** |

| Expected earnings growth | +0.2 points | 2.7% | Driven by lower-income households |

| Perceived probability of job loss | -0.4 points | 14.8% | Slightly above 12-month average |

| Expected quit rate | +1.2 points | 18.7% | More confident workers willing to leave |

| Probability of finding new job | +2.5 points | 45.6% | Below 12-month average of 48.6% |

*Source: *

The improvement in expected earnings growth is good news, especially that it's being driven by lower-income households. But the probability of finding a new job if you lose your current one remains below its trailing average. That's a sign that workers don't feel confident about their options.

### The Bigger Picture: What Economists Are Seeing

The anxiety reflected in consumer surveys matches what economists and business leaders are observing.

**Morgan Fleming**, a labor market analyst, noted that "the disconnect between strong headline employment numbers and persistent worker anxiety reflects a fundamental shift in how companies are approaching hiring" .

**JPMorgan's outlook** for 2026 suggests the labor market may start the year on "shaky footing" before potentially recovering later. The bank's Chief U.S. Economist Michael Feroli pointed to uncertainty around trade policy as a key factor holding back hiring .

"Businesses can't plan when they don't know what the rules will be six months from now," Feroli wrote. "That uncertainty leads to a 'wait and see' approach—low hiring, but also low firing" .

### The "No-Hire" Phenomenon

Perhaps most striking is what's happening inside corporate America. A December 2025 survey by the Yale School of Management found that 66% of business leaders expected either to freeze hiring or reduce headcount in 2026 .

**Chris Leighton**, CEO of staffing firm Kelly Services, described it as "a massive wait-and-see posture. Companies are investing in capital and technology, not people" .

Federal Reserve Governor Christopher Waller put it even more starkly: "When I travel around the country and talk to CEOs, they're all telling me the same thing: 'We're not hiring because we're waiting to see what AI can do. Which jobs can be replaced, which can't'" .

That's not a healthy dynamic for workers. Waller called it "not a healthy labor market" and noted that "everyone is worried about their jobs" .

 The Inflation Angle: Still Top of Mind

While the headlines have moved on from peak inflation, consumers haven't.

### Persistent Price Concerns

The Conference Board survey made clear that "comments about prices, inflation, and the cost of goods remained at the top of consumer's minds" . The Michigan survey found that roughly 46% of consumers spontaneously mentioned high prices as a factor eroding their finances .

That's not a niche concern. It's nearly half the country.

### Inflation Expectations

The good news is that short-term inflation expectations are coming down. The Michigan survey's one-year measure fell to 3.4% from 4% in January . The New York Fed's survey also showed declines in expected price increases for gas, medical care, and rent .

But longer-term expectations remain sticky at around 3.3% . And for specific categories, the numbers are still alarming:

Medical care:** Expected price increase of 9.8% 

College education:** Expected increase of 9.0% 

Rent:** Expected increase of 6.8% 

When people expect their rent to go up nearly 7% and their medical costs to rise 10%, it's hard to feel confident about the future.

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## The Political and Policy Angle

 Trade and Tariffs

Both surveys noted increased mentions of trade and politics. The Conference Board's Peterson specifically called out that "mentions of trade and politics also increased in February" .

This isn't abstract. The IMF issued a report this week explicitly criticizing U.S. trade policy, stating that "without high tariffs, the U.S. economy would perform better" and warning that protectionist measures could "drag on economic activity more than expected" .

### The Fed's Dilemma

The IMF also weighed in on monetary policy, suggesting the Federal Reserve could cut rates modestly to around 3.4% but should avoid further cuts "unless there is a substantial deterioration in the job market" .

That's a narrow path. The Fed has to balance persistent inflation concerns (evident in consumer surveys) against a cooling labor market (evident in corporate behavior).

IMF Managing Director Kristalina Georgieva emphasized that "the credibility of the Fed's policy is an extremely valuable asset that must be carefully maintained by protecting its independence" .

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## What This Means for You

### If You're Worried About Your Job

You're not alone. The data shows that while the headline unemployment rate remains low, underlying anxiety is high. Companies are in a "wait and see" mode, freezing hiring rather than expanding .

If you're in a field that's vulnerable to AI disruption—data analysis, software development, marketing—it's worth paying attention to where your industry is headed. The pause in hiring isn't random; it's strategic.

### If You're Feeling the Squeeze from Prices

Again, you're not alone. Nearly half of Americans are spontaneously mentioning high prices as a problem . That's not something to feel bad about—it's something to factor into your planning.

Short-term inflation expectations are coming down, but prices aren't. They're just rising more slowly. Budgeting and adjusting expectations for the "new normal" of higher price levels is still necessary.

### If You're an Investor

Consumer confidence data matters for markets because consumer spending accounts for about 70% of the economy . When confidence is low, spending tends to follow.

The divergence between different consumer groups—higher-income households feeling more resilient, lower-income households feeling squeezed—suggests that the recovery will remain uneven. Luxury goods may hold up better than mass-market retail.

### If You're Just Trying to Make Sense of It All

The February confidence numbers are modestly better, but "better" is a low bar. We're coming off a January low, and we're still well below where we were in late 2024.

The labor market cloud is real. Job anxiety is real. Price pressures, while easing, are still very real.

The best approach is to stay informed, stay flexible, and recognize that the economic headlines don't always match individual experience. If you're feeling squeezed, that's not a failure to understand the data—it's the data that matters most for you.

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## Frequently Asked Questions

**Q: What is the Consumer Confidence Index?**

A: It's a monthly survey by the Conference Board that measures how optimistic or pessimistic consumers are about the economy. It's based on consumers' assessments of current business and employment conditions, plus their expectations for the next six months .

**Q: How does it differ from the Michigan sentiment survey?**

A: The Conference Board index is more influenced by labor market conditions from the worker's perspective and has a larger sample. The Michigan survey focuses more on household finances and the impact of inflation, with more detailed questions .

**Q: Did consumer confidence improve in February?**

A: Yes, modestly. The Conference Board index rose to 91.2 from 89.0 in January, beating expectations. The Michigan index also rose slightly to 56.6 from 56.4 .

**Q: Why are consumers still worried if confidence improved?**

A: The improvement is from a low base, and the Present Situation Index actually fell. Consumers feel slightly less pessimistic about the future, but they feel worse about current conditions. Plus, mentions of inflation and prices remain at the top of people's minds .

**Q: What's happening with the labor market?**

A: It's a mixed picture. Some measures improved—expected earnings growth ticked up, and the perceived chance of job loss declined slightly. But the probability of finding a new job remains below its average, and corporate hiring is frozen at many companies .

**Q: Why are companies not hiring?**

A: Two main reasons: uncertainty about trade policy and tariffs, and a "wait and see" approach to AI. Many companies are pausing hiring to figure out which jobs can be automated before adding headcount .

**Q: What are consumers saying about inflation?**

A: A lot. About 46% of consumers spontaneously mention high prices as a problem for their personal finances. That's been above 40% for seven straight months .

**Q: Are inflation expectations coming down?**

A: Short-term expectations are moderating. The Michigan survey's one-year measure fell to 3.4% from 4% in January. But longer-term expectations remain sticky around 3.3% .

**Q: What does this mean for interest rates?**

A: The IMF suggested the Fed could cut rates modestly to around 3.4% but should avoid further cuts unless the job market substantially deteriorates. The Fed has to balance persistent inflation concerns against a cooling labor market .

**Q: Where can I find the full reports?**

A: The Conference Board releases its data on the last Tuesday of each month. The University of Michigan releases preliminary and final reports mid-month and at month-end. Both are available on their respective websites.

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## The Bottom Line

Here's what I keep coming back to.

Consumer confidence improved in February. That's the headline, and it's true. The index beat expectations, the expectations component jumped, and there are signs that the worst of the pessimism might be behind us.

But beneath that headline, the story is more complicated.

The Present Situation Index fell. That means people feel worse about their current circumstances than they did a month ago. Mentions of inflation and prices are still everywhere. And the labor market—the engine that drives consumer spending—remains a source of deep anxiety.

**Dana Peterson** at the Conference Board was careful to note that confidence is "well below the four-year peak" . **Joanne Hsu** at Michigan pointed out that sentiment is "about 13 percent below a year ago and more than 20 percent below January 2025" .

The improvement is real, but it's from a low base. And the structural issues—high prices, frozen hiring, AI uncertainty, trade policy confusion—aren't going away.

For consumers, the message is to stay informed but not get whipsawed by every monthly data point. The economy is moving slowly, in fits and starts. February was a step in the right direction, but there's a long way to go.

For workers, the message is to stay flexible. The "no-hire" phenomenon is real, and it's not going away overnight. If you're in a vulnerable field, start thinking about how you can adapt.

For all of us, the message is that the post-pandemic economy is still finding its footing. The old rules don't always apply. And the only certainty is uncertainty.

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*Got thoughts on the economy? Feeling the squeeze or feeling optimistic? Drop a comment and let me know.*