Despite weakening inflation, The Conference Board Consumer Confidence Index fell in April to 101.3, with 100 being the divider between a positive and negative reading, down from 104 in March.
Consumer assessment of current business conditions improved somewhat in April with 18.8% of consumers saying business conditions were good, in line with the month earlier.
However, 18.1% said business conditions were bad, down from 19.3% in the month prior.
Consumer appraisal of the labor market improved slightly month over month with 48.4% of consumers saying jobs were plentiful, up slightly from 47.9% in March while 11.1% of consumers said jobs were hard to get, down slightly from 11.4%.
Consumers were more pessimistic about the prospects for business conditions over the next six months.
In April, 13.5% of consumers expected business conditions to improve, down from 16.4%, and 21.5% expected business conditions to worsen, up from 19.2% in the month earlier, the Conference Board reported.
Consumers’ assessment of the short-term labor market outlook was less positive month over month with 12.5% of consumers expecting more job availability, down from 15.5% in March, while 21% anticipated fewer jobs, up slightly from 20.5%.
Consumers’ short-term income expectation was, on balance, somewhat more favorable as 15.7% of consumers expected their incomes to increase, down slightly from 16.2% in the month before while 11.6% expected their incomes would decrease, down from 13.8%.
“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, economics, at The Conference Board. “Consumers became more pessimistic about the outlook for both business conditions and labor markets. Compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months. They also expect fewer jobs to be available over the short term. April’s decline in consumer confidence reflects a particular deterioration in expectations for consumers under 55 years of age and for households earning $50,000 and over. Meanwhile, April’s results show consumer inflation expectations over the next 12 months remain essentially unchanged from March at 6.2%. Although that level is down substantially from the peak of 7.9% 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.”