Consumer Confidence Falls to 9-Month Low as Expectations Sink Further

Consumer confidence worsened this month to the lowest since July as Americans grew more pessimistic about future economic conditions, even as their views of current conditions improved.

The Conference Board’s said Tuesday that its consumer confidence index decreased in April to 101.3 from 104 in March. Economists had forecast the index would more or less hold at the previous month’s level.

The barometer of current economic conditions rose to 151.1 from 148.9. The share of consumers saying business conditions are good remained steady at 18.8 percent while those saying conditions are bad declined from 19.3 percent to 18.1 percent.

The share saying jobs are plentiful rose to 48.4 percent from 47.9 while those saying jobs are hard to get declined to 11.4 percent from 11.7 percent.

The measure of expectations, which indicates the outlook six months into the future, fell to 68.1, the lowest since July. Compared with a month ago, consumers are more pessimistic about the outlook for both business conditions and labor markets. Fewer households expect business conditions to improve and more expect worsening of conditions ahead. The share with a favorable outlook for their household income fell but still remains above those with an unfavorable outlook.

“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 of economics at the Conference Board.

Oxyildirim said inflation expectations remain unchanged since the March reading.

“Meanwhile, April’s results show consumer inflation expectations over the next 12 months remain essentially unchanged from March at 6.2 percent—although that level is down substantially from the peak of 7.9 percent reached last year, it 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,” he said.