Index: Consumer expectations not so great

Ataman Ozyildirim

A monthly measure of consumer confidence has declined on less upbeat expectations for business and labor conditions.

The Conference Board reported its Consumer Confidence Index fell 2.7 points to 101.3 in April.

A component of the index tracking consumer assessments of current conditions increased. But a component tracking their short-term outlook decreased and remains at level signaling a recession within the next year.

“Compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months. They also expect fewer jobs to be available over the short run,” said Ataman Ozyildirim, senior director of economics at the Conference Board, a member-driven think tank based in New York.

The decline reflects less optimism in particular among consumers under 55 years old and for households earning $50,000 and more, Ozyildirim said.

Consumers said they expect to decrease spending on homes, automobiles, appliances and vacations, a signal they could be economizing amid growing pessimism. Expectations for inflation over the next year were essentially unchanged at 6.2 percent.

The Present Situation component of the index rose 2.2 points to 151.1 in April.

The proportion of consumers who responded to the household surveys upon which the April index was based who described business conditions as “good” remained unchanged from March at 18.8 percent. The share of those who called conditions “bad” fell 1.2 points to 18.1 percent.

The proportion of consumers who said jobs were “plentiful” rose a half point to 48.4 percent. The share of those who said jobs were “hard to get” fell three-tenths of a point to 11.1 percent.

The expectations component of the index retreated 5.9 points to 68.1. The component has remained below 80 for 13 out of the last 14 months. Readings below 80 are associated with a recession within the next year.

The share of consumers who said they expect business conditions to improve over the next six months fell 2.9 points to 13.5 percent. The proportion of those who said they anticipated worsening conditions rose 2.3 points to 21.5 percent.

The share of consumers who said they expect more jobs to become available fell three points to 12.5 percent. The proportion of those anticipating fewer jobs rose a half point to 21 percent.