Consumer Confidence Takes a Tumble

Consumer optimism dipped in April, according to a recent Conference Board Consumer Confidence Index.

The index stands at 95.2, compared with its benchmark of 100 in 1985, and is down from 101.4 in March, which saw an increase. Its components include the Present Situation Index, which decreased from 109.5 to 106.8 month-over-month, and the Expectations Index, which dropped from 96 to 87.5.

“Consumer confidence, which had rebounded in March, gave back all of the gain and more in April,” said Lynn Franco, director of Economic Indicators at The Conference Board. “This month’s retreat was prompted by a softening in current conditions, likely sparked by the recent lackluster performance of the labor market and apprehension about the short-term outlook. The Present Situation Index declined for the third-consecutive month. Coupled with waning expectations, there is little to suggest that economic momentum will pick up in the months ahead.”

Consumers’ view of current-day conditions continued to soften as those who assessed business conditions as good slipped from 26.7% to 26.5%. Consumer pessimism also fell, however, as those who claim business conditions are bad moved from 19.4% to 18.2%.

Regarding the job market and wages, opinions were less favorable. Those who stated jobs were plentiful declined from 21% to 19.1%, and those who believe jobs are hard to get rose from 25.5% to 26.4%. Fewer respondents anticipated more jobs in the near future (15.3% to 13.8%). The proportion of consumers expecting their incomes to grow decreased (18.8% to 18.3%), as those who expected a decline in income rose (9.7% to 11.2%).

March’s rebound regarding the short-term outlook also recoiled. The percentage of consumers expecting an improvement in business conditions over the next six months edged from 16.8% to 16%, and those who expect conditions to worsen grew from 8.1% to 9.4%.

- Diana Mota, NACM associate editor

To read about The Conference Board and PricewaterhouseCoopers Measure of CEO Confidence survey and The Conference Board Leading Economic Index for the United States, see this week’s eNews.

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