Economic Indicators: Consumer Confidence Reaches Its Lowest Level Since 2022
Consumer confidence took a nosedive in April, as inflation concerns and a gloomy job market outlook dampened spirits to their lowest point since 2022.
The Conference Board reported a retreat in its consumer confidence index to 97 for April, falling short of economists’ predictions at 104 and trailing March’s 103.1. Dana Peterson, the chief economist at the Conference Board, noted, “Consumers soured on the current labor market situation and grew more apprehensive about future business conditions, job prospects, and income.” According to Peterson, consumer worries mainly revolved around skyrocketing prices, particularly for essentials like food and fuel, with geopolitical tensions taking a distant backseat.
Beyond the index, expectations for the next six months hit their lowest since July 2022, driven by dimmer views on future business conditions, job prospects, and income. The breakdown showed stability in confidence among those earning less than $50,000 annually, contrasting with weakened sentiment among higher earners. “While consumer confidence has dipped to its second-lowest level in three years, there’s still a semblance of stability,” noted Wells Fargo senior economist Tim Quinlan, cautioning that persistent high living costs and a lukewarm job market have soured moods.
The downturn in confidence coincided with a mixed bag of US economic data. Inflation readings continued to outpace expectations, with the core Personal Consumption Expenditures (PCE) index rising 2.8% year-over-year in March, above estimates. Ben Ayers, senior economist at Nationwide, flagged this trend as “concerning,” suggesting it dashes hopes for rate cuts in the first half of 2024. Federal Reserve Chair Jerome Powell echoed these sentiments, expressing disappointment in the lack of progress toward inflation goals. Amidst this, first-quarter economic growth fell short, with GDP expanding at an annualized pace of 1.6%, missing estimates. This slower growth, juxtaposed with persistent inflation pressures, underscores the challenges facing the US economy.
