Consumer confidence fell more than expected in April as economic uncertainty clouds Americans’ outlook for the future.
The Conference Board’s consumer confidence index ticked down to 86 from March’s revised reading of 93.9, marking the fifth consecutive month of declines. Economists polled by FactSet were expecting the index to fall to a reading of 88.
The expectations index, which measures consumers’ short-term outlook for the economy, plunged 12.5 points to a reading of 54.4, the lowest level since October 2011. The share of consumers expecting fewer jobs in the next six months–32.1%–was nearly as high as in April 2009, said Stephanie Guichard, senior economist of global indicators at The Conference Board.
The perceived likelihood of a U.S. recession happening in the next 12 months increased to 72% this month, the highest level since the spring of 2023.
“Expectations about future income prospects turned clearly negative for the first time in five years, suggesting that concerns about the economy have now spread to consumers worrying about their own personal situations,” Guichard added. “However, consumers’ views of the present have held up, containing the overall decline in the Index.”
Inflation expectations for 12 months ahead reached 7%, the highest since November 2022.
The University of Michigan’s consumer sentiment index, a competing gauge, has also fallen steadily this year, even though the final reading for April came in a tick higher than consensus estimates.
“Today’s data from The Conference Board echoes other measures of consumer sentiment — people broadly feel OK about their current financial situation but are apprehensive about the future,” said Elizabeth Renter, senior economist at NerdWallet. “They may be planning to pull back on optional spending categories. The potential impacts of tariffs and stock market volatility are broad, and households seem to be bracing for impact.”
Economists track consumer confidence and sentiment as a forward-looking indicator that can hint at Americans’ willingness to spend. Per the Consumer Confidence survey, purchasing plans for homes and cars declined, as did vacation intentions.
That said, sentiment and spending haven’t correlated in recent years, which has been a boon to the U.S. economy given that consumer spending accounts for about 70% of gross domestic product.
“The real test of how Americans spend will be seen tomorrow when personal income numbers are released,” said Robert Frick, corporate economist with Navy Federal Credit Union. “Those have been rising strongly, and history shows that if we have money, we’ll spend it despite the jitters we may be feeling.”
