Consumer Confidence Falls in April

SurveysMay 01, 2024

Consumer Confidence Falls in April

Concerns about rising prices, politics, and global conflicts continue to dampen consumer outlook.

Woman holding a dress
The Conference Board’s consumer confidence index fell to 97 in April, marking a third consecutive month of decline.
New York—U.S. consumer confidence fell in April as consumers held a more negative outlook about the current labor market and future jobs, income, and business conditions.

It marks the third consecutive month of decline, reaching its lowest level since July 2022.

The Conference Board’s consumer confidence index fell to 97 in April, down from a downwardly revised 103.1 in March.

“Despite these three months of weakness, the gauge continues to move sideways within a relatively narrow range that’s largely held steady for more than two years,” said the Conference Board.

“Despite April’s dip in the overall index, since mid-2022, optimism about the present situation continues to more than offset concerns about the future,” said Dana M. Peterson, chief economist at the Conference Board.

Confidence declined among all age groups and income levels, except for the $25,000 to $49,999 bracket.

Consumers under 35 continued to show greater confidence than those over 35.

Households with incomes below $25,000 and those above $75,000 reported the largest drop in confidence. 

Over a six-month basis, confidence for consumers earning less than $50,000 has been stable, while confidence among consumers earning more has declined.

“According to April’s write-in responses, elevated price levels, especially for food and gas, dominated consumer’s concerns, with politics and global conflicts as distant runners-up,” said Peterson.

Average 12-month inflation expectations remained stable at 5.3 percent in spite of concerns about food and energy prices. 

The “Consumers’ Perceived Likelihood of a U.S. Recession Over the Next 12 Months” rose slightly in April but was below the May 2023 peak.

The Present Situation Index, which measures consumers’ current view of business and labor market conditions, fell to 142.9 in April from a downwardly revised 146.8 in March.

Consumers’ view of current business conditions was more optimistic in April, with the percentage of respondents who said current business conditions are “good” up at 21 percent from 19 percent in March, while those who said conditions are “bad” decreased to 17 percent from 18 percent.  

Consumers’ view of the labor market, however, was more negative.

The percentage of respondents who felt jobs were plentiful was down to 40 percent from 42 percent, while 15 percent said jobs were “hard to get,” up from 12 percent in March.

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The Expectations Index, which measures consumers’ outlook for income, business, and labor market conditions in the near future, fell to 66.4 from an upwardly revised 74 in March.

Notably, an Expectations Index reading below 80 often signals a recession ahead, said the Conference Board.

Expectations for the next six months slipped to the lowest level since July 2022, it said.

Looking at short-term business conditions, respondents’ outlooks were more pessimistic, with 13 percent of respondents expecting business conditions to improve, down from 14 percent in March.

The number of respondents that expect them to worsen was up to 20 percent from 19 percent.

Consumers’ assessment of the short-term labor market outlook in April was also more negative.

The percentage of respondents who expect more jobs to be available was down to 12 percent from 14 percent, while the number of respondents who expect fewer jobs to be available was up to 20 percent from 19 percent.

Consumers’ assessment of their short-term income prospects was also more pessimistic in April.

The number of respondents who expect their incomes to increase was down to 15 percent from 17 percent in March, while a flat 14 percent of respondents expect their incomes to decrease.

Consumers were also less optimistic about their family’s financial situation, both currently and over the next six months, a measure not included when calculating the Present Situation and Expectations Index.

Expectations that stock prices will increase over the year ahead declined slightly, after rising every month since November of last year, it said.

The percentage of consumers expecting higher interest rates in the year ahead rose again to 53.8 percent in April. 

Plans to buy homes and big-ticket appliances, purchases that tend to be sensitive to interest rates, continued to soften.

Vacation plans, both within the U.S. and abroad, also declined to the lowest level since June 2023.

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