Consumer confidence fell to a 9-month low on worries about jobs and a recession

Numbers: A A survey of consumer confidence fell to a nine-month low of 101.3 in April, reflecting concerns about a potential recession and softening labor market.

The closely followed index fell 2.7 points from 104 revised in the previous month. Conference Board said on Tuesday. Confidence level in April is lowest since July 2022.

Consumer confidence indicates whether the economy is getting better or worse. Sutten is below levels associated with a healthy economy.

Economists polled by The Wall Street Journal had predicted the index would register 104.

Key Details: Americans worry more about the future. A measure of confidence looking six months ahead fell to 68.1 from 74 in April – a nine-month low.

The board said stable readings below 80 often signal a recession within the next year. The index of expectations has been below that level in all but one of the last 14 months.

Younger Americans and households making $50,000 or more are the most pessimistic.

“Purchase plans for homes, autos, appliances and vacations all retreated in April, a signal that consumers may be frugal amid growing pessimism,” said Ataman Ozildrim, the board’s senior director of economics.

However, a measure of how consumers now feel about the economy actually rose to a two-month high of 151.1 from 148.9.

The consumer-confidence survey puts a lot of weight on Americans’ views of the labor market. Many companies are still hiring and the unemployment rate is at a 54-year low, but layoffs are rising and job openings are down.

Inflation expectations did not change much. Americans expect prices to rise 6.2% over the next 12 months.

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Expectations for inflation last summer were 7.9%.

Looking ahead: “Consumers are more pessimistic about both business conditions and labor markets,” Ozyildirim said. “Some households expect business conditions to improve and expect conditions to deteriorate over the next six months.”

Big picture: The US economy grew at a stronger-than-expected pace in the first quarter of 2023, the period from January to March. Forecasters polled by The Wall Street Journal predicted GDP would expand at a 2% annual rate.

Yet the economy is unlikely to repeat that performance in the spring. Rising interest rates and still-high inflation have slowed growth, and a red-hot labor market is cooling slightly.

Many economists think a recession is not far off, based on low levels of confidence apparently shared by many Americans.

Market Reaction: Dow Jones Industrial Average

DJIA

and the S&P 500

SPX

extended their losses in Tuesday trading.

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