The Conference Board Consumer Confidence Index fell 31.9 points in April, but consumers’ short-term outlook improved. The Index now stands at 86.9 (1985=100) and follows a sharp decline in March from 118.8.
The historic low reading at 25.0 was measured during the Great Recession in February 2009. Forecasts ranged from a low of 65.0 to a high of 100.0. The consensus forecast was 90.0.
The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – declined from 166.7 to 76.4. Those claiming business conditions are “good” decreased from 39.2% to 20.8%, while those claiming business conditions are “bad” increased from 11.7% to 45.2.
“Consumer confidence weakened significantly in April, driven by a severe deterioration in current conditions,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The 90-point drop in the Present Situation Index, the largest on record, reflects the sharp contraction in economic activity and surge in unemployment claims brought about by the COVID-19 crisis.”
The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – improved from 86.8 in March to 93.8 this month. The percentage of consumers expecting business conditions will improve over the next six months increased from 18.7% to 40.0%. But those expecting business conditions will worsen also increased, from 16.4% to 25.7%.
“Consumers’ short-term expectations for the economy and labor market improved, likely prompted by the possibility that stay-at-home restrictions will loosen soon, along with a re-opening of the economy,” Franco added. “However, consumers were less optimistic about their financial prospects and this could have repercussions for spending as the recovery takes hold.”
“The uncertainty of the economic effects of COVID-19 will likely cause expectations to fluctuate in the months ahead.”
The Consumer Confidence Survey is conducted monthly and based on a probability-design random sample for the Conference Board by Nielsen. The cutoff date for the preliminary results was April 17.