Consumer confidence rose vigorously in April as faint signs of optimism surfaced on a still challenging economic landscape.
The Conference Board’s Consumer Confidence Index jumped to 39.2 in April, up from 26.9 in March. The gain resulted from a boost in the expectations component of the overall Index, which leaped to 49.5 from 30.2 last month. While the present situation component rose far more modestly, to 23.7 from 21.9 in March, the overall result still qualified as the fourth-largest increase in the 32-year history of the survey.
“The Present Situation Index posted a moderate gain, a sign that conditions have not deteriorated further, and may even moderately improve, in the second quarter,” said Lynn Franco, director of The Conference Board Consumer Research Center. “The sharp increase in the Expectations Index suggests that consumers believe the economy is nearing a bottom; however, this Index still remains well below levels associated with strong economic growth.”
Mitchel Friedman, senior vice president of RCS Real Estate Advisors, commented, “People are feeling better because they are more comfortable with the world we are in today. Four to five months ago, the concern was, ‘How bad will it get?’ I don’t think we’ve hit bottom.…Confidence is not restored, but fear is abating.”
According to the Conference Board’s latest survey, consumers’ assessment of current job market conditions remain mixed, with those stating jobs are hard to get declining to 47.9 percent from 48.7 percent in March. However, those who said jobs are plentiful also fell, this time to 4.5 percent from 4.7 percent last month.
The index hit an all-time low of 25.3 in February and rebounded only marginally in March. Since peaking last September at 61.5, the expectations component’s strongest showing had been its November mark of 44.2.
Looking ahead on a short-term basis, those who expect business conditions to worsen over the next six months fell to 25.3 percent from 37.8 percent, while respondents who anticipate conditions will improve rose to 15.6 percent from 9.6 percent last month.
Over the next six months, consumers who anticipate fewer jobs in the short term fell to 33.6 percent from 41.6 percent and those who expect more jobs rose to 13.9 percent from 7.3 percent.
Jewelry designer Steven Lagos believes things are bottoming out. “What you’re seeing is the economy in a reset mode.…There’s [some] pent-up demand. Everybody wants this to be over; they want to feel better about their situation. The very wealthy are still very wealthy, but the spending patterns are changing. They’re still doing things to satisfy their desires, it is just not as outward. It is now out of vogue to be spending,” the designer said.