Economic Watch: Consumer Confidence Lowest Since December

A measure of U.S. consumer confidence fell in April, its biggest drop since October 2013 and the lowest level in four months.

The private research group, The Conference Board, reported on Tuesday its Consumer Confidence Index, which had increased in March, fell to 95.2 in April, down from 101.4 the month before.

“Consumer confidence, which had rebounded in March, gave back all of the gain and more in April,” said Lynn Franco, director of economic indicators at The Conference Board. “This month’s retreat was prompted by a softening in current conditions, likely sparked by the recent lackluster performance of the labor market, and apprehension about the short-term outlook.”

The Present Situation Index decreased from 109.5 last month to 106.8 in April, its third straight monthly drop. “Coupled with waning expectations, there is little to suggest that economic momentum will pick up in the months ahead,” said Franco.

The Expectations Index declined from 96 last month to 87.5 in April.

The survey showed consumers’ appraisal of current-day conditions continued to soften with those saying business conditions are “good” edging down from 26.7% to 26.5%. However, those claiming business conditions are “bad” also decreased from 19.4% to 18.2%.

Consumers were less favorable in their assessment of the job market. Those stating jobs are “plentiful” declined from 21% to 19.1% while those claiming jobs are “hard to get” rose from 25.5% to 26.4%.

Consumers’ optimism about the short-term outlook, which had rebounded in March, retreated in April. The percentage of consumers expecting business conditions to improve over the next six months decreased from 16.8% to 16%, while those expecting business conditions to worsen increased from 8.1% to 9.4%.

“Amid an uncertain economic environment plagued by declining business investment and hiring, stagnant wage momentum, and heightened uncertainty surrounding the sustainability of the U.S. recovery, the average American is becoming increasingly concerned,” said Lindsey Piegza, chief economist at the investment banking firm Sterne Agee. “Wednesday’s report of expectantly minimal growth across the first three months will likely justify this morning's marked decline in confidence.”