Consumers More Pessimistic About Future Business Conditions, Jobs, and Income
NEW YORK, April 30, 2024 /PRNewswire/ — The Conference Board Consumer Confidence Index® deteriorated for the third consecutive month in April, retreating to 97.0 (1985=100) from a downwardly revised 103.1 in March. Despite these three months of weakness, the gauge continues to move sideways within a relatively narrow range that’s largely held steady for more than two years.
The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—declined to 142.9 (1985=100) in April from a downwardly revised 146.8 in March. Meanwhile, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell to 66.4 (1985=100) from a slightly upwardly revised 74.0 last month. An Expectations Index reading below 80 often signals a forthcoming recession.
“Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income,” said Dana M. Peterson, Chief Economist at The Conference Board. “Despite April’s dip in the overall index, since mid-2022, optimism about the present situation continues to more than offset concerns about the future.
“In the month, confidence declined among consumers of all age groups and almost all income groups except for the $25,000 to $49,999 bracket. Nonetheless, consumers under 35 continued to express greater confidence than those over 35. In April, households with incomes below $25,000 and those with incomes above $75,000 reported the largest deteriorations in confidence. However, over a six-month basis, confidence for consumers earning less than $50,000 has been stable, but confidence among consumers earning more has weakened.”
Peterson added: “According to April’s write-in responses, elevated price levels, especially for food and gas, dominated consumer’s concerns, with politics and global conflicts as distant runners-up. Average 12-month inflation expectations remained stable at 5.3 percent despite concerns about food and energy prices. Consumers’ Perceived Likelihood of a US Recession over the Next 12 Months rose slightly in April but is still well below the May 2023 peak.”
Assessments of the present situation weakened in April but remain in relatively optimistic territory. While consumers continued to rate current business conditions positively, their views of the current employment situation weakened, with fewer consumers saying that jobs are plentiful and more reporting jobs are hard to get.
Meanwhile, expectations for the next six months slipped to the lowest level since July 2022, driven by a more pessimistic outlook for future business conditions, labor market conditions, and income expectations. In addition, consumers were less optimistic about their family’s financial situation, both currently and over the next six months (measures not included in calculating the Present Situation and Expectations Index).
Expectations that stock prices will increase over the year ahead declined slightly, after rising every month since November of last year. Meanwhile, the share of consumers expecting higher interest rates over the year ahead rose again, to 53.8 percent in April. On a six-month basis, buying plans for homes and big-ticket appliances, which are interest-rate sensitive, continued to soften. Vacations plans also decreased to the lowest level since June 2023, with planned trips both within the US and abroad declining.
According to a supplemental question asking consumers what spending they would cut back on to save money, discretionary purchases rose to the top—including food away from home, clothing/fashion items, entertainment away from home, and vacations. Meanwhile, fewer consumers plan to reduce spending on non-discretionary purchases like childcare, education, and health care.
Present Situation
Consumers’ assessment of current business conditions was moderately more positive in April.
- 20.6% of consumers said business conditions were “good,” up from 19.2% in March.
- 17.4% said business conditions were “bad,” down from 17.6%.
Consumers’ appraisal of the labor market deteriorated in April.
- 40.2% of consumers said jobs were “plentiful,” down from 41.7% in March.
- 14.9% of consumers said jobs were “hard to get,” up from 12.2%.
Expectations Six Months Hence
Consumers were more pessimistic about the short-term business conditions outlook in April.
- 12.8% of consumers expect business conditions to improve, down from 14.3% in March.
- 19.9% expect business conditions to worsen, up from 18.5%.
Consumers’ assessment of the short-term labor market outlook worsened in April.
- 11.7% of consumers expect more jobs to be available, down from 14.3% in March.
- 19.6% anticipate fewer jobs, up from 18.8% last month.
Consumers’ assessment of their short-term income prospects also deteriorated in April.
- 15.4% of consumers expect their incomes to increase, down from 17.3% in March.
- 13.9% expect their incomes to decrease, up from 13.5%.
*Assessment of Family Finances and Recession Risk
- Consumers’ assessment of their Family’s Current Financial Situation was less positive in April.
- Consumers were also less optimistic about their Family’s Financial Situation going forward.
- Consumers’ Perceived Likelihood of a US Recession over the Next 12 Months rose slightly in April.
*Reducing Spending to Save Money: Where Consumers Are Planning to Cut Back
*Charts can be viewed at https://www.conference-board.org/topics/consumer-confidence
The monthly Consumer Confidence Survey®, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise, and panel of over 36 million consumers. The cutoff date for the preliminary results was April 24.
Source: April 2024 Consumer Confidence Survey®
The Conference Board
The Conference Board publishes the Consumer Confidence Index® at 10 a.m. ET on the last Tuesday of every month. Subscription information and the technical notes to this series are available on The Conference Board website: https://www.conference-board.org/data/consumerdata.cfm.
About The Conference Board
The Conference Board is the member-driven think tank that delivers Trusted Insights for What’s Ahead™. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. ConferenceBoard.org.
SOURCE The Conference Board
