The Consumer Confidence Index (CCI), calculated by FGV’s Brazilian Institute of Economics (IBRE), dropped 1.4 points in February, falling from 88.8 to 87.4 points. The index advanced 6.7 points compared to the same period the previous year.

“Consumer confidence in February settled around the same level of last November, driven by a lower satisfaction with the economic situation and less optimistic prospects for the coming months. Despite stable inflation expectations and falling interest rates, consumers are less optimistic about employment in the coming months and more cautious about new purchases, which can potentially slow down the expected economic recovery”, said Viviane Seda Bittencourt, Coordinator of the Consumer Survey.

In February, both the assessments on current situation and expectations for the next months showed worse results. The Current Situation index (ISA) fell 1.4 point, down to 75.2 points, interrupting the trend of six consecutive increases. The Expectations Index (IE) fell for the second month in a row, varying -1.1 points – down from 97.6 to 96.5 points.

Among the CCI’s items, the consumer assessment regarding the current economic situation was the main factor behind such lower confidence rate in February. Despite the 2.7-point drop in the indicator that gauges current satisfaction with the economy, the result suggests a settlement considering a return of the previous month, back to the same level recorded in December 2017 (82.7). The indicator regarding perspectives for the economic situation in the next six months retreated for the second consecutive month, totaling 114.1 points. 

Regarding household finances, only future prospects remained favorable. The indicator that measures the consumer satisfaction with the current financial situation fell 0.6 point, down to 68.2 points, while the indicator that gauges optimism regarding personal finances in the coming months rose 1.9 points – the highest level since October 2014 (96.9). However, despite the brighter prospects for the financial situation, consumers were less likely to spend – the indicator that measures the mood for purchases of durable goods over the next few months fell 3.6 points.

The behavior of confidence varies significantly across all four income ranges surveyed. Confidence rose in households with incomes under BRL 2,100.00 and over BRL 9,600.00, while confidence fell for the others. The highest variation in the index occurred in households with income between BRL 2,100.01 and BRL 4,800.00, due to poorer assessments regarding the current situation. 

The February 2018 edition collected information from 1,611 households between February 1 and 20. The next Consumer Survey results will be published on March 23. The complete results are available on the website.