The Conference Board Consumer Confidence Index, which had declined sharply in March, fell further in April. The Index now stands at 62.3 (1985=100), down from 65.9 in March. The Present Situation Index decreased to 80.7 from 90.6. The Expectations Index was virtually unchanged, 50.1 versus 49.4 in March.
“This month’s decline in Consumer Confidence was the result of yet another sharp decline in the Present Situation Index,” said Lynn Franco, director of The Conference Board Consumer Research Center. “This continued weakening suggests that not only has the feeble level of growth in the first quarter spilled over into the second quarter, but that economic conditions may have slowed even further. And, not only are lackluster business and job conditions eroding confidence, but rising gasoline prices are undoubtedly heightening concerns. Consumers’ inflation expectations continue to rise and this measure now matches the all-time high reached in the aftermath of Hurricane Katrina. The percentage of respondents intending to take a vacation over the next six months has fallen to a 30-year low, another sign of consumers turning more cost conscious. Looking ahead, consumers’ outlook for the economy, the job market and their income prospects remains quite pessimistic and little changed from last month. Or, in other words, the glass remains half empty.”
Consumers’ assessment of current conditions weakened further in April, the Conference Board said. Consumers claiming business conditions are “bad” increased to 26.7 percent from 25.5 percent, while those claiming business conditions are “good” was virtually unchanged at 15.3 percent versus 15.6 last month. Consumers’ appraisal of the labor market was also more negative than last month. The percentage of consumers saying jobs are “hard to get” rose to 27.9 percent from 24.5 percent, while those claiming jobs are “plentiful” declined to 16.6 percent from 19.2 percent.
Consumers’ short-term outlook remained quite grim in April, the Conference Board said. Consumers expecting business conditions to worsen over the next six months increased to 27 percent from 26 percent, while those anticipating business conditions to improve increased to 10.1 percent from 8.6 percent in March. The outlook for the labor market was also mixed, but still pessimistic. Those expecting fewer jobs in the months ahead increased to 32.8 percent from 29.3 percent, while those anticipating more jobs increased to 9 percent from 8 percent. The proportion of consumers expecting their incomes to increase declined to 15.1 percent from 16.1 percent.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS, a custom research company. The cutoff date for April’s preliminary results was April 22.