Consumer confidence falls to nine-month low amid job, recession concerns

Consumer confidence declined in April as consumers grew more pessimistic regarding the outlook for jobs and the economy even as they grew more confident about current conditions.

The Conference Board Consumer Confidence Index fell to 101.3 in April, down from 104.0 in March. The Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — fell to 68.1 from 74.0 in March.  The survey was fielded from April 3 — about three weeks after the bank failures in the United States — to April 19.)

Consumers did feel a bit better about their current situation. The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — increased to 151.1 from 148.9 last month.

“While consumers’ relatively favorable assessment of the current business environment improved somewhat in April, they became more pessimistic about the outlook for both business conditions and labor markets,” said Ataman Ozyildirim, senior director, economics at The Conference Board. “Compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months. Consumers also expect fewer jobs to be available over the short term.”

April’s decline in confidence reflects particular deterioration in expectations for consumers under 55 years of age and for households earning $50,000 and over, noted Ozyildirim.

April’s results showed that consumer inflation expectations over the next 12 months remain essentially unchanged from March at 6.2%, which, while still high, is down substantially from the peak of 7.9% reached last year, is still elevated.

“Overall purchasing plans for homes, autos, appliances, and vacations all pulled back in April, a signal that consumers may be economizing amid growing pessimism,” Ozyildirim said.

Detailed results from the April report are below.

Present Situation

Consumers’ assessment of current business conditions improved somewhat in April:

• 18.8% of consumers said business conditions were “good,” same as last month.
• However, 18.1% said business conditions were “bad,” down from 19.3%.

Consumers’ appraisal of the labor market improved slightly:

• 48.4% of consumers said jobs were “plentiful,” up slightly from 47.9%.
• 11.1% of consumers said jobs were “hard to get,” down slightly from 11.4% last month.

Expectations Six Months Hence

Consumers became more pessimistic about the short-term business conditions outlook in April:

• 13.5% of consumers expect business conditions to improve, down from 16.4%.
• And, 21.5% expect business conditions to worsen, up from 19.2%.
• Consumers’ assessment about the short-term labor market outlook was less positive:

• 12.5% of consumers expect more jobs to be available, down from 15.5%.
• 21.0% anticipate fewer jobs, up slightly from 20.5%.

Consumers’ short-term income prospects was, on balance, somewhat more favorable:

• 15.7% of consumers expect their incomes to increase, down slightly from 16.2% last month.
• 11.6% expect their incomes will decrease, down from 13.8% last month.
• The monthly Consumer Confidence Survey based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise, and panel of over 36 million consumers. The cutoff date for the preliminary results was April 19.