US consumer confidence slumps to an almost five-year low
Corporate executives have signalled concerns that the recent plunge in confidence will filter through into weaker demand, while warning that consumers can expect to see higher prices because of tariffs
[WASHINGTON] US consumer confidence fell in April to an almost five-year low on growing pessimism about prospects for the economy and labour market due to tariffs.
The Conference Board’s gauge of confidence decreased nearly right points to 86, the weakest since May 2020, data released on Tuesday (Apr 29) showed. It marked the fifth straight monthly decline, the longest such stretch since 2008. The median estimate in a Bloomberg survey of economists called for a reading of 88.
A measure of consumer expectations for the next six months plunged to the lowest level since 2011, while a gauge of present conditions also fell.
The Conference Board’s data are consistent with the University of Michigan’s survey and illustrate growing consumer apprehension that higher duties on foreign goods will damage the economy and job market, while pushing up prices.
The share of consumers that expected business conditions will be worse six months from now rose to the highest level since March 2009, when the economy was in a recession. The share of seeing fewer jobs in the short-term also rose to a 16-year high.
“The three expectation components – business conditions, employment prospects, and future income – all deteriorated sharply, reflecting pervasive pessimism about the future,” Stephanie Guichard, senior economist at The Conference Board, said.
Corporate executives have signalled concerns that the recent plunge in confidence will filter through into weaker demand, while warning that consumers can expect to see higher prices because of tariffs.
The measure of consumer inflation expectations rose to the highest since November 2022, according to The Conference Board’s report. The share expecting higher interest rates in the year ahead also rose.
The share of consumers saying jobs were currently hard to get increased to 16.6 per cent, the highest since October. Fewer respondents said jobs were plentiful than a month earlier. The difference between these two – a metric closely followed by economists to gauge the job market – decreased to the lowest since September.
Job vacancies, trade
Separate data reported earlier Tuesday showed that US merchandise trade deficit unexpectedly widened in March to a record as companies continued importing goods to get ahead of tariffs. Because imports count against gross domestic product, the data point to a weaker print when the government releases its initial GDP estimate on Wednesday.
US job openings fell in March to the lowest level since September, indicating softer labour demand, according to another report from the Bureau of Labor Statistics. But the labour market is still holding up fairly well, with the number of layoffs at the lowest since June and hiring remaining steady.
While sentiment figures, along with other so-called “soft data” that include surveys of businesses, have been downbeat, the weakness has yet to translate into a notable pullback in consumer spending. Retail sales in March posted the biggest gain in more than two years, inflation broadly cooled, and hiring picked up.
“So far, the global trade war has mostly weighed on soft data, like confidence and sentiment readings,” Bret Kenwell, an investment analyst with eToro, said in a note. “However, there’s a worry that it will eventually hit the hard data, impacting retail sales, inflation, and the labour market.”
Expectations of personal finances deteriorated this month, with the largest share since the onset of the pandemic expecting incomes to decline in the next six months. BLOOMBERG
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