Consumer Confidence Index rebounds in April

The Conference Board’s Consumer Confidence Index, which had been on the decline for the past four months, improved sharply in April. The Index now stands at 81.0 (1985=100), up from 61.4 in March. The Expectations Index rose to 84.8 from 61.4. The Present Situation Index improved to 75.3 from 61.4.

“The swift outcome in the Middle East has helped quell consumers’ short-term concerns,” says Lynn Franco, director of The Conference Board’s Consumer Research Center. “While an increase of this magnitude occurred after the Persian Gulf War in 1991, this post-war surge differs in that both components of the Index posted gains. The increase in the Present Situation Index, especially in labor market conditions, may very well signal a turnaround in confidence and a more favorable outlook for consumer spending.”

Consumers’ assessment of current conditions was less negative than in March. Those rating present business conditions as “bad” declined to 23.7% from 30%, while those holding the opposite view rose to 16.2% from 13.6%. Labor market conditions also improved. Consumers reporting jobs are hard to get declined to 29.5% from 32.3%, while those claiming jobs are plentiful edged up to 13% from 11.4%.

Consumers’ short-term expectations improved considerably. Those anticipating an improvement in business conditions over the next six months rose to 18.7% from 13%. Consumers anticipating conditions to worsen dropped to 12.3% from 20%.

The employment outlook was also more optimistic. Consumers anticipating more jobs to become available increased to 16.7% from 10.8%, while those expecting fewer jobs fell to 20.9% from 26.5%. The proportion of consumers anticipating an increase in their incomes rose to 17.1%, from 15.8%.

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 NFO WorldGroup, a member of The Interpublic Group of Companies.