WASHINGTON – US consumer confidence eased slightly in April but remains elevated even as inflation continues to cloud its optimism for the remainder of the year.
The Conference Board said on Tuesday that its consumer confidence index – which takes into account consumers’ perceptions of current conditions and their outlook for the future – fell to 107.3 in April from 107.6 in March.
The business research group’s Current Situation Index, which measures consumers’ perceptions of current business and working conditions, also fell slightly this month to 152.6 from 153.8 in March.
The expectations index, which is based on consumers’ six-month outlook for income, business and labor market conditions, rose to 77.2 in April from 76.7 in March. It was 80.8 in February and remains a weak point in the survey.
“Overall purchase intentions have fallen from recent levels as interest rates have started to rise,” said Lynn Franco, the Conference Board’s senior director of economic indicators. “Meanwhile, inflation concerns eased from an all-time high in March but remained elevated.”
Franco added that inflation and the war in Ukraine could further hurt confidence and further dampen consumer spending this year.
Inflation rose last year at its highest rate in more than 40 years, with the cost of food, gas, housing and other necessities squeezing American consumers and wiping out their pay increases.
According to the Index, Americans have scrapped some vacation plans but are slightly more intent on making major purchases like a car or major appliance.
The US Federal Reserve raised interest rates by a quarter point last month, the main anti-inflation mechanism. Several rate hikes are expected this year with the possibility of a half-point hike.
The Labor Department said earlier this month that its consumer price index rose 8.5% in March from 12 months earlier, the sharpest year-on-year increase since 1981. Prices have been pushed by tightening supply chains, resilient consumer demand and global disruptions in the economy Buoyed by Russia’s war against Ukraine, food and energy markets deteriorated.
Consumers were slightly less optimistic about the job market, even as US employers added at least 400,000 jobs for 11 straight months, bringing the unemployment rate down to 3.6%. That’s the lowest rate since the pandemic began two years ago, and just above the half-century low of 3.5% set two years ago.
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