WASHINGTON – U.S. consumer confidence fell this month to the lowest level in four months, knocked down by a slowdown in hiring.
The Conference Board said Wednesday that its consumer confidence index fell to 95.2 in April from 101. 4 in March, the lowest reading since December’s 93.1.
Consumers’ assessment of current economic conditions fell for the third straight month, and their expectations for the future fell as well.
Lynn Franco, the Conference Board’s director of economic indicators, blamed “the recent lacklustre performance of the labour market.” The American economy generated just 126,000 jobs last month, breaking a 12-month streak of at least 200,000 new jobs a month; 31 states registered job losses in March.
Consumers’ view of the current job market deteriorated in April. They were also more likely to say that there would be fewer jobs and that their own incomes would be lower in six months. The share saying they planned to buy a car or a major appliance within six months fell. The decline in confidence hit all age groups.
Also weighing on consumers’ spirits: Gasoline prices, which tumbled to a nationwide average low of $2.03 a gallon in late January, have bounced back up to $2.55 a gallon, according to AAA. That may be dampening the desire and ability of Americans to go shopping. Still, gasoline prices were more than a $1 higher, or $3.70, a year ago.
Economists believe that overall economic growth slowed to between 1 per cent and 1.5 per cent in the January-March quarter. They are forecasting a rebound to growth of around 3 per cent for the rest of this year. The economy grew 2.4 per cent in 2014.
Consumer spending accounts for about 70 per cent of U.S. economic activity. Daniel Silver, an economist with J.P. Morgan, warned in a research report that “the recent weakening in confidence raises some questions about whether we will see real consumer spending accelerate as much as anticipated.”
Despite the drop this month, the confidence index is well above April 2014’s 81.7.