Consumer Confidence Swings Ahead in April

After a roller coaster ride in the last few months, it's still too early to tell if confidence has stabilized.

Consumer confidence bounced back up in April, but after a roller coaster ride in the last few months, it’s too early to tell if confidence has stabilized.

This story first appeared in the May 1, 2013 issue of WWD.  Subscribe Today.

One month up and one month down. That’s been the pattern since January, with the latest survey by The Conference Board’s Consumer Confidence Index rising to 68.1 from 61.9 in March. Both components of the index saw increases. The Present Situation Index rose to 60.4 from 59.2, while the Expectations Index improved to 73.3 from 63.7.

Lynn Franco, director of economic indicators at The Conference Board, said the improvement was due to consumers’ expectations about short-term economic outlook and better personal income prospects.

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“Consumers’ confidence has been challenged several times over the past few months by such events as the fiscal cliff, the payroll tax hike and the sequester. Thus, while expectations appear to have bounced back, it is too soon to tell if confidence is actually on the mend,” she said.

IHS economist Chris G. Christopher Jr. said, “Looking ahead, we expect the consumer mood to gradually gain some traction, with one big caveat — political bickering over the sequester or debt ceiling issues is likely to cause strong consumer mood swings.”

He also noted that average inflation expectations have fallen slightly due to falling pump prices.

Consumers in general had a more upbeat outlook on the economy six months out. Those surveyed who said they expect business conditions to improve over that time period rose to 16.9 percent from 15 percent.

The outlook of respondents on the jobs front also was slightly more positive, with those who said jobs are “plentiful” inching up to 9.8 percent from 9.5 percent. Those expecting more jobs in the months ahead rose to 14.2 percent from 13 percent.

In addition, 16.8 percent of those surveyed expect their incomes to increase — that’s up from 14.6 percent last month.