Consumer confidence fell yet again in April, marking the fifth consecutive month of declines—a clear indication of pessimistic attitudes toward the economic situation in the country at large, according to the latest data released today by The Conference Board.
The Consumer Confidence Index dropped 7.9 points, continuing a pattern of similar drops from March and February.
Stephanie Guichard—senior economist of Global Indicators at The Conference Board—stated that “The decline was largely driven by consumers’ expectations. The three expectation components—business conditions, employment prospects and future income—all deteriorated sharply, reflecting pervasive pessimism about the future.”
The present situation index graded slightly downward, 0.9 points to 133.5. Perhaps most consequentially, the expectations index—with any score under 80 indicating that a recession is “usually” ahead— dropped 12.5 points to 54.4, its lowest level since October 2011.
This report comes against the backdrop of global trade disruption that seems to be playing a major factor in the drop in consumer confidence.
The release made note of the fact that “tariffs are now on top of consumers’ minds, with mentions of tariffs reaching an all-time high. Consumers explicitly mentioned concerns about tariffs increasing prices and having negative impacts on the economy.”
Consumers anticipating a recession of the next 12 months (not included in the calculation of the consumer confidence index), also reached a two-year high.
On a six-month moving average basis, purchasing plans for both homes and cars also experienced a decline, as did vacation intentions. Plans for purchasing big-ticket items such as appliances and electronics receded for the month of April, but were mostly up on a six-month moving average basis.
The one silver lining in The Conference Board’s report—potentially a reflection of the fact that the impacts of tariffs haven’t fully been felt—was consumers’ assessment of current business conditions. While 19.2% of consumers said business conditions were “good” in April, an increase from 18.3% in March, the share of consumers who said business conditions were “bad” decreased modestly from 16.5% in March to 16.1% in April.
Consumers’ views of the labor market weakened in April, with 31.7% of respondents saying that jobs were “plentiful,” a decrease from the 33.6% of respondents who gave the same reply in March. The number of respondents who said jobs were “hard to get” increased month-over-month, from 16.1% to 16.6% in April.
Consumers also expressed pessimism about the six month timeframe, with 15.7% of respondents expecting an improvement in business conditions, a decrease from March’s 17.8% figure. The percentage of those expecting conditions to worsen increased significantly, from 26.1% to 34.8%.
A similar pattern played out for consumers’ view on the near-future labor market, with just 13.7% of consumers expecting more jobs to be available, a decrease from 16.7% in March. This alongside an increase in the share of consumers expecting fewer jobs at 32.1% in April, an increase from 28.8% in March.
Consumers also expected their incomes to decline in lockstep with other negative metrics in the release, with 15% saying they expected their income to increase, down from 17.1% in March. The negativity was again reflected in the share of consumers saying they expected their incomes to decrease, with 18.2% expressing that concern—up from 14.9% in March.
Guichard also remarked that “high financial market volatility in April pushed consumers’ views about the stock market deeper into negative territory, with 48.5% expecting stock prices to decline over the next 12 months.”
