Global| Apr 28 2020U.S. Consumer Confidence Craters in April as Coronavirus Spreads
by:Tom Moeller
|in:Economy in Brief
Summary
• Appraisal of current conditions plunges but expectations rise. • Buying plans falter. • All age groups exhibit less confidence. The Conference Board's Index of Consumer Confidence declined 26.9% (-32.7% y/y) during April to a level [...]
• Appraisal of current conditions plunges but expectations rise.
• Buying plans falter.
• All age groups exhibit less confidence.
The Conference Board's Index of Consumer Confidence declined 26.9% (-32.7% y/y) during April to a level of 86.9 following a 10.4% March drop, revised from -9.5%. It was the lowest level of confidence since June 2014. A decline to an index level of 90.0 had been expected in the Action Economics Forecast Survey. Over the last 20 years, there has been a 67% correlation between the level of confidence and the y/y change in real consumer spending.
The index of current conditions weakened 54.2% (-54.8% y/y) to the lowest level since December 2013. A greatly lessened 20.8% of respondents felt that business conditions were good, down from 39.2% in March. Jobs were viewed as hard to get by 33.6% of respondents, up from 13.8% in March.
Despite the decline in current conditions, the index of expected business conditions in six months rose 8.1%, after falling 19.7% in March. Forty percent felt that would business conditions would improve, up from 18.7% in March. Forty- one percent of respondents felt that there would be more jobs in six months, up from 16.9% last month, but a greatly lessened 16.7% felt that income would increase.
Expectations for the inflation rate in twelve months surged to 5.3% this month from 4.5% in March. It was the highest level since October 2014. Interest rates were expected to move higher in 12 months by 36.1% of respondents, half the high in 2018. Just 1.5% planned to buy a new home, but that remained up from 0.9% in December. A greatly lessened 2.8% planned to buy a new car while 45.1% planned to buy a major appliance, down from 55.0% in February.
By age group, the index of confidence amongst those under age 35 eroded 26.5% (-35.0% y/y). For respondents aged 35-54, confidence fell 25.2% (-33.5% y/y) and for those over age 55, it weakened 29.1% (-31.8% y/y).
The Consumer Confidence data are available in Haver's CBDB database. The total indexes appear in USECON, and the market expectations are in AS1REPNA.
| Conference Board (SA, % Chg.) | Apr | Mar | Feb | Apr Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | -26.9 | -10.4 | 1.7 | -32.7 | -1.4 | 8.0 | 20.7 |
| Present Situation | -54.2 | -1.5 | -2.6 | -54.8 | 3.1 | 13.8 | 20.3 |
| Expectations | 8.1 | -19.7 | 6.6 | -8.7 | -6.0 | 2.6 | 21.1 |
| Consumer Confidence By Age Group | |||||||
| Under 35 Years | -26.5 | -6.7 | 3.7 | -35.0 | 0.3 | 2.7 | 6.4 |
| Aged 35-54 Years | -25.2 | -11.0 | 6.4 | -33.5 | -1.1 | 7.0 | 16.4 |
| Over 55 Years | -29.1 | -10.8 | -3.5 | -31.8 | -1.9 | 11.8 | 33.5 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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