by Concerns remain among those surveyed regarding job security, income levels, global conflicts and food and energy prices
WASHINGTON — The Consumer Confidence Board reported this week that Consumer Confidence fell for the third straight month in April amid rising concerns about job security, the world situation and food and energy prices.
The index fell to 97, from a downwardly revised 103.1 in March, which officials said was the lowest level since 2022. The Present Situation Index, which is based on consumers’ assessment of current business and labor market conditions, fell to 142.9, from a downwardly revised 146.8 in March.
The Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, fell to 66.4, down from an upwardly revised 74 in March. The Conference Board said that a reading below 80 often is a sign of a looming recession.
Dana Peterson, chief economist at the Conference Board, said that confidence declined among consumers of all age groups and almost all income levels except for the $25,000 to $49,000 segment. This occurred as “consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability and income.”
“Nonetheless, consumers under 35 continued to express greater confidence than those over 35,” Peterson noted, adding that 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.”
How this impacts furniture sales remains to be seen. A supplemental questionnaire noted that consumers likely will be cutting back on discretionary purchases such as dining out, clothing and fashion items, entertainment outside the home and vacations. Furniture ranked at No. 8 of the Top 10 areas where they planned to reduce or eliminate spending.
Areas where consumers did not plan to reduce or eliminate spending included nondiscretionary purchases such as child care, education and health care.
One gauge of the economy related to home furnishings sales are interest rate levels that affect home sales. The survey noted that the share of consumers expecting higher interest rates over the coming year rose to 53.8% in April, up from just over 50% in March. On a six-month basis, buying plans for homes and big-ticket appliances continued to soften while vacation plans also fell to their lowest level since June 2023, including planned trips in the U.S. and abroad.
Peterson added that based on write-in responses, and despite average 12-month inflation expectations that remained stable, inflation and elevated price levels for food and gas dominated consumer concerns. This was followed by concerns relating to politics and global conflicts. In addition, Peterson said, consumers’ perceived likelihood of a U.S. recession over the next 12 months rose slightly in April but was well below a May 2023 peak. Meanwhile, expectations for higher stock prices declined slightly after rising each month since this past November.
Other highlights of the report included the following:
Of their Present Situation:
+ 20.6% of consumers said business conditions were good, up from 19.2% in March.
+ 17.4% of consumers said business conditions were bad, down from 17.6%.
And of the labor market:
+ 40.2% of consumers said jobs were plentiful, down from 41.7% in March.
+ 14.9% said jobs were hard to get, up from 12.2%.
Expectations six months from now showed consumers were more pessimistic about short-term business conditions.
+ 12.8% of those surveyed said they expect business conditions to improve, down from 14.3% in March.
+ 19.9% of consumers said they expect business conditions to worsen, up from 18.5%.
And of the short-term labor market outlook:
+ 11.7% of those surveyed said they expect more jobs to be available, down from 14.3% in March.
+ 19.6% anticipate fewer jobs, up from 18.8% in March.
And of their short-term income prospects:
+ 15.4% of consumers said they expect their incomes to rise, down from 17.3% in March.
+ 13.9% expect their incomes to decrease, up from 13.5% in March.
