You are here
US consumer confidence unexpectedly declines to four-month low
[WASHINGTON] Consumer confidence unexpectedly declined in April to a four-month low as Americans' views of the labor market and the outlook on the economy deteriorated.
The Conference Board's index dropped to 95.2 from a revised 101.4 reading in March, according to data on Tuesday from the New York-based private research group. The gauge was lower than the most pessimistic forecast in a Bloomberg survey.
The fewest respondents in four months said jobs were plentiful in April and income expectations cooled, the report showed, signaling consumers will remain guarded about spending. The setback in sentiment may indicate demand will be slow to pick up after a stronger dollar, bad winter weather in some regions and a labour dispute at West Coast ports weighed on the economy in the first quarter.
"The big drop in gasoline prices looks like it's over, and prices are edging up a little bit, so that's a little bit of a negative," said Jim O'Sullivan, chief US economist at High Frequency Economics in Valhalla, New York. "There is a little bit of acceleration under way in nominal wages, but it's not a big deal so far." The Conference Board's gauge averaged 96.9 during the last expansion and 53.7 during the 18-month recession that ended June 2009. In January, the index rose to 103.8, the best reading since Aug 2007.
The Conference Board's consumer expectations gauge for the next six months fell to 87.5 in April, the lowest since September, from 96. The measure of present conditions dropped to a four-month low of 106.8 from 109.5. The share of respondents who said business conditions were good decreased to 26.5 per cent from 26.7 per cent.
The share of respondents who said jobs were plentiful fell to 19.1 per cent in April from 21 percent.
The portion of Americans who said they expected their incomes to grow in the next six months dropped to 18.3 per cent from 18.8 per cent in March.
The share of respondents expecting more jobs to become available in the next half-year declined to 13.8 per cent in April from 15.3 per cent.
The Conference Board data are at odds with other confidence measures. The University of Michigan reported earlier this month that its sentiment index improved to the second-highest level in more than eight years as Americans held more favorable views of the economic outlook and inflation.
While the Bloomberg Consumer Comfort Index has declined for two straight weeks, it's also close to an almost eight-year high.
Faster wage increases would help propel bigger spending gains. Average hourly earnings advanced 2.1 percent in March from a year earlier, close to the 2 percent increase on average since the expansion started in June 2009.
Retailers including Wal-Mart Stores Inc. and Target Corp. have recently announced that they'll increase the minimum wage for their workers. The employment cost index shows compensation spending by employers held at a 2.2 per cent year-over-year rate in the fourth quarter to match the highest since mid-2011. First-quarter figures are due Thursday from the Labor Department.