Consumer Confidence fell in April following a 15-point jump in March. The Conference Board's Consumer Confidence Index was 108.8, slightly down from the revised 110.7 in March. This exceeded economist's expectations of 107.5. The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.
Confidence was mixed across both portions of the Conference Board index. The Expectations portion of the index, measuring future economic activity, registered 110.2 in April, relatively unchanged from 110.0 in March.
The Present Conditions Index, another factor in the total composite index, decreased 4.5 points from 111.5 in March to 107.0 in April. This index is a measure of how consumers perceive the current state of the economy. Spending behavior is generally related to consumer's feelings in the Present Conditions Index.
The University of Michigan's Consumer Sentiment Index, a comparable index, also decreased in April to 93.0 from 95.7 in March. Both component indices fell. The Present Conditions Index was 99.2 from 100.4 in March, and Expectations decreased 3.6 points to 89.1.
Economists attribute the recent dip in consumer confidence to consumer's perceptions of present conditions during the weak economic recovery. Struggling labor markets, uncertainty in the Middle East, and corporate cost-cutting lowered consumer confidence levels. Despite this, consumer spending remains strong and confidence levels are still above those registered at the end of last year. In addition, consumer's future expectations continue to be well above levels of the last twelve months.
Since consumer spending accounts for two-thirds of the U.S. economy, consumer confidence is a critical component for economic recovery. Economists expect consumer confidence to continue to fluctuate until the economy more fully recovers.
Sources: www.cnnfn.com
www.conference-board.com
www.economy.com
