The Conference Board’s Consumer Confidence Index, which increased in March to a six-year high, declined slightly in April, according to a just released report.
The index now stands at 82.3, down from 83.9 in March. The Present Situation Index decreased to 78.3 from 82.5, while the Expectations Index was virtually unchanged at 84.9.
“Consumer confidence declined slightly in April, as consumers assessed current business and labor market conditions less favorably than in March,” said Lynn Franco, director of economic indicators at The Conference Board. “However, their expectations regarding the short-term outlook for the economy and labor market held steady. Thus, while sentiment regarding current conditions may have slipped a bit, consumers do not foresee the economy, or the labor market, losing the momentum that has been building up over the past several months.”
Consumer confidence is a closely watched indicator of the American economy because consumer spending drives about 70% of all economic activity.
Consumers’ appraisal of current conditions pulled back moderately in April. Those claiming business conditions are “good” edged down to 21.8% from 22.6%, while those claiming business conditions are “bad” rose to 24.4% from 23.5%.
Consumers’ assessment of the labor market was also slightly more negative. Those stating jobs are “plentiful” declined to 12.9% from 13.8%, while those saying jobs are “hard to get” increased to 32.5% from 31.4%.
Consumers’ expectations held steady in April. The percentage of consumers expecting business conditions to improve over the next six months was unchanged at 17.4%, while those anticipating business conditions to worsen increased marginally to 10.3% from 10.1%.
Consumers were slightly more optimistic about the outlook for the labor market. Those expecting more jobs in the months ahead increased to 15% from 14.1%, while those expecting fewer jobs edged up to 17.9% from 17.5%.
The proportion of consumers anticipating their incomes to grow increased to 17.1% from 15.3%, but those expecting a drop in their incomes also increased, to 12.9% from 11.5%.