Falling consumer confidence does not bode well for the economy.
The Consumer Confidence Index, from The Conference Board, fell to 101.3 from 104 in March.
“While consumers’ relatively favorable assessment of the current business environment improved somewhat in April, their expectations fell and remain below the level which often signals a recession looming in the short-term,” said Ataman Ozyildirim, senior director, Economics at The Conference Board, in a statement.
“Consumers became more pessimistic about the outlook for both business conditions and labor markets. Compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months," Ozyildirim added. "They also expect fewer jobs to be available over the short term. April’s decline in consumer confidence reflects particular deterioration in expectations for consumers under 55 years of age and for households earning $50,000 and over.”
Furthermore, consumer inflation expectations over the next 12 months remain basically unchanged. So according to Ozildirim, that means that purchasing plans for homes, autos, appliances, and vacations all pulled back in April, "a signal that consumers may be economizing amid growing pessimism.”
The group's Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased to 151.1 (1985=100) from 148.9 last month. And the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell to 68.1 (1985=100) from 74.0. The Expectations Index has now remained below 80—the level associated with a recession within the next year—every month since February 2022, with the exception of a brief uptick in December 2022. The survey was fielded from April 3—about three weeks after the bank failures in the United States—to April 19.
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 For Next Six Months
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.
