Consumer Confidence Continued Its Sharp Upturn In April
U.S. consumer outlook continued to improve in April, following a substantial improvement in March. The Conference Board’s Consumer Confidence Index reached 121.7 last month, up from 109 one month earlier.
The Conference Board’s Present Situation Index—based on consumers’ assessment of current business and labor market conditions—showed significant improvement in April, rising from 110.1 in March to 139.6. The Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—rose more modestly, from 108.3 in March to 109.8 in April.
“Consumer confidence has rebounded sharply over the last two months and is now at its highest level since February 2020,” says Lynn Franco, senior director of economic indicators at The Conference Board. “Consumers’ assessment of current conditions improved significantly in April, suggesting the economic recovery strengthened further in early Q2. Consumers’ optimism about the short-term outlook held steady this month. Consumers were more upbeat about their income prospects, perhaps due to the improving job market and the recent round of stimulus checks. Short-term inflation expectations held steady in April but remain elevated. Vacation intentions posted a healthy increase, likely boosted by the accelerating vaccine rollout and further loosening of pandemic restrictions.”
Consumers’ appraisal of current conditions improved significantly in April. The percentage of consumers rating business conditions as “good” increased from 18.3 percent to 23.3 percent, while the share claiming business conditions are “bad” fell from 30.1 percent to 24.8 percent. Consumers’ assessment of the labor market also improved. The percentage of consumers saying jobs are “plentiful” increased from 26.5 percent to 37.9 percent, while those claiming jobs are “hard to get” declined from 18.5 percent to 13.2 percent.
Consumers’ optimism about the short-term outlook improved moderately. The share expecting business conditions to improve over the next six months rose marginally, from 40.3 percent to 40.5 percent, while the percentage expecting business conditions to worsen stood relatively unchanged at 11.9 percent. Consumers’ outlook regarding the job market was slightly less upbeat. The proportion expecting more jobs in the months ahead fell from 35.9 percent to 34.5 percent, while those anticipating fewer jobs rose from 14.4 percent to 15.5 percent. Regarding short-term income prospects, 17.9 percent of consumers expect their incomes to increase in the next six months, up from 15.4 percent in March. Those expecting their incomes to decrease fell to 10.9 percent, down from 12.6 percent.