Consumers don’t have a rosy outlook for the stock market either.
Mirroring the recent University of Michigan’s monthly Surveys of Consumers, the Consumer Confidence Index plummeted in April.
The Conference Board’s Consumer Confidence Index fell 7.9 points in April to 86. It was the fifth straight month that it declined.
The Present Situation Index had a decent score of 133.5, gauged on a baseline of 100. This indicates some confidence in conditions right now, although it was down 0.9 points from March.
However, confidence drops off a cliff for the Expectations Index, which gauges consumers short-term outlook for income, business, and labor conditions. It fell 12.5 points to 54.4 – which is the lowest since October 2011.
To put that in perspective, a score of 80 or below usually indicates that a recession is ahead, according to the Conference Board, so this is well below that.
“Consumer confidence declined for the fifth consecutive month in April, falling to levels not seen since the onset of the COVID pandemic,” Stephanie Guichard, senior economist, global indicators, at the Conference Board, said.
Low expectations
As the numbers indicate, the decline was entirely due to low future expectations. The three components of the expectations index, the job market, business conditions, and future income, all dropped sharply in April.
Specifically, the share of consumers expecting fewer jobs in the next six months was 32.1% — the highest since April 2009, which was during the middle of the Great Recession.
The drop in consumer confidence was the steepest among those aged 35 to 55 in households making more than $125,000 a year. Further, the decline in confidence was shared across all political affiliations.
No confidence in stock market either
The April report also revealed that trust in the stock market was flagging as well. Specifically, 48.5% of those surveyed said they expect stock prices to decline over the next 12 months. This is also the highest share since October 2011.
Further, consumers anticipate inflation reaching 7% over the next 12 months. Currently, the CPI inflation rate is 2.4%. This is the highest expectation for inflation since November 2022.
Further, the percentage of consumers anticipating a recession over the next 12 months rose to a two-year high.
Finally, purchasing plans for bigger ticket items like homes and cars plummeted, as did vacations intentions. Plans to buy appliances and electronics were also lower, but not to the same degree.
Notably, the share of consumers planning to spend more on dining out in the near future had one of the largest month-on-month declines on record.
