Consumer Confidence Fell More Than Forecast in April
Consumer confidence retreated more than forecast in April as Americans’ optimism about the outlook for the economy and employment waned.
The Conference Board’s sentiment index fell to 94.2 this month from a revised 96.1 reading in March, the New York-based private research group said April 26. The median forecast in a Bloomberg News survey called for a decrease to 95.8. A measure of consumers’ expectations decreased to a more than two-year low.
Sentiment has remained subdued as Americans digest election-year uncertainty and financial markets that are shaking off early-year turbulence caused by concerns about the global economy. Stronger U.S. labor-market prospects, including emerging signs of a pickup in wage growth, should help keep confidence from faltering.
“The economy seems to have lost a bit of momentum in the first quarter, and consumers may be a little nervous about the election and general state of the economy,” David Sloan, senior economist at 4cast Inc. in New York, said before the report. “Consumer fundamentals seem to be solid enough with incomes growing, employment growing, but generally confidence seems to be drifting a little lower.”
In a separate report April 26, durable goods orders rose less than forecast in March. Bookings for goods and materials meant to last at least three years climbed 0.8% after a revised 3.1% slump the previous month, Commerce Department data showed. Orders for business equipment were little changed last month, also weaker than projected.
Estimates in the Bloomberg survey for the Conference Board’s confidence measure ranged from 92.5 to 99 after a previously reported March reading of 96.2. The gauge averaged 98 for all of last year.
The Conference Board’s gauge of consumer expectations for the next six months fell to 79.3, the lowest since February 2014, from a revised 83.6 in March.
The proportion of consumers expecting more jobs to become available in the next half-year dropped to 12.2% from 13% in the prior month. The share anticipating improving business conditions fell to 13.4%, the smallest since October 2011. Income expectations were mixed. While the share anticipating higher incomes dropped to an almost two-year low, the percentage expecting lower incomes also decreased.
The measure of present conditions rose to 116.4 in April from a revised 114.9 in the previous month.
Americans viewed the current state of affairs in the labor market more favorably than future conditions. The share who said jobs were currently harder to get decreased to 22.7%, the lowest since August.
The April 26 report is in line with the University of Michigan’s consumer sentiment measure, which has declined for four straight months amid rising gasoline prices.
The average price of a gallon of regular gasoline was $2.14 as of April 24, the highest since mid-November, according to data from motoring group AAA.
Buying plans deteriorated in April, with 5.4% saying they expected to purchase a new home within six months. That was the smallest share since August. The proportion planning to buy appliances and autos also decreased.
Even as stock prices have rebounded from an early-2016 lull, Americans might be digesting evidence of sluggish growth as the U.S. economy tries to weather the storm of diminishing demand from abroad.
The economy barely grew in the first quarter, according to Bloomberg survey estimates ahead of the Commerce Department’s first estimate of gross domestic product growth for the three months ended in March, due for release April 28. The economy expanded 0.6% after 1.4% in the final three months of 2015, the survey median shows.
