The Conference Board Consumer Confidence Index deteriorated for the third consecutive month in April, falling to 97.0 from a downwardly revised 103.1 in March. Despite these three months of weakness, the indicator continues to move sideways within a relatively narrow range that has largely remained stable for more than two years.
The Conference Board, the think tank that provides information on what’s to come in economic matters, notes that the Current Situation Index, based on consumers’ assessment of current business and labor market conditions, fell to 142.9 in April from a downwardly revised figure of 146.8 in March.
Meanwhile, the expectations index, based on consumers’ near-term outlook for income, business and labor market conditions, fell to 66.4 from a slightly upwardly revised 74.0 last month. An Expectations Index reading below 80 often indicates an upcoming recession.
“Confidence fell further in April, reaching its lowest level since July 2022, as consumers became less positive about the current labor market situation and more concerned about future business conditions, job availability and income.” ”said Dana M. Peterson, chief economist at The Conference Board.
“Despite the decline in the general index in April, since mid-2022, optimism about the current situation continues to more than offset concerns about the future,” Peterson added.
The Conference Board notes that in the month, confidence declined among consumers of all age groups and almost all income groups, except in the $25,000 to $49,999 bracket. However, consumers under 35 continued to express greater confidence than those over 35.
In April, households with incomes below $25,000 and those with incomes above $75,000 reported the largest declines in confidence. However, for six months, confidence among consumers earning less than $50,000 has remained stable, but confidence among consumers earning more has weakened.
Peterson added: “According to written responses from April, high price levels, especially for food and gas, dominated consumer concerns, with politics and global conflicts coming in second. “The 12-month average inflation expectations remained stable at 5.3 percent despite concerns about food and energy prices.”
Consumers’ perceived probability of a U.S. recession over the next 12 months increased slightly in April, but is still well below the May 2023 peak.
For more details of the report and its methodology, go here.
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