Consumer confidence deteriorated further in April as weak business and job conditions and rising food and gas prices force Americans to tighten their spending, The Conference Board reported today.
The Consumer Confidence Index fell to 62.3 this month from a reading of 65.9 in March, with the Present Situation Index diving 10 points, from 90.6 to 80.7.
"This month’s decline in consumer confidence was the result of yet another sharp decline in the Present Situation Index," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. "This continued weakening suggests that not only has the feeble level of growth in the first quarter spilled over into the second quarter, but that economic conditions may have slowed even further. And, not only are lackluster business and job conditions eroding confidence, but rising gasoline prices are undoubtedly heightening concerns. Consumers’ inflation expectations continue to rise and this measure now matches the all-time high reached in the aftermath of Hurricane Katrina.
"The percentage of respondents intending to take a vacation over the next six months has fallen to a 30-year low, another sign of consumers turning more cost-conscious," Franco said. "Looking ahead, consumers’ outlook for the economy, the job market and their income prospects remains quite pessimistic and little changed from last month. Or, in other words, the glass remains half empty."
The survey found that more consumers (26.7 percent) believe current business conditions are "bad," up from 25.5 percent in March, while those claiming conditions are "good" was mostly flat at 15.3 percent versus 15.6 percent last month.
The percentage of consumers saying jobs are "hard to get" rose to 27.9 percent in April from 24.5 percent in March, while those claiming jobs are "plentiful" declined to 16.6 percent from 19.2 percent.
Consumers expecting business conditions to worsen over the next six months increased to 27 percent from last month’s 26 percent, while those anticipating business conditions to improve increased to 10.1 percent from 8.6 percent in March.
The outlook for the labor market was also mixed, but still pessimistic. Those expecting fewer jobs in the months ahead increased to 32.8 percent from 29.3 percent, while those anticipating more jobs increased to 9 percent from 8 percent. The proportion of consumers expecting their incomes to increase declined to 15.1 percent from 16.1 percent.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.
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