Consumer confidence fell to a 9-month low in April amid fears of a looming recession, according to a survey released by the Conference Board Tuesday.
The business group’s closely watched consumer confidence index fell for the third time in four months and reached its lowest level since July 2022. The index fell from 104 in March to 101.3 in April. Economists had expected it to remain flat.
The Conference Board’s expectations index, which tracks consumers’ short-term expectations for income and labor market conditions, has been below 80 for more than a year.
That typically signals that the U.S. will soon enter a recession, according to Ataman Ozyildirim, the Conference Board’s senior director of economics.
“Consumers became more pessimistic about the outlook for both business conditions and labor markets,” Ozyildirim said in a statement. “Compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months. They also expect fewer jobs to be available over the short term.”
Ozyildirim said that the survey “reflects particular deterioration in expectations for consumers under 55 years of age and for households earning $50,000 and over.”
The index found that while consumers are comfortable with the present situation, they’re less hopeful about the future. Just 13.5 percent of consumers said business conditions will improve, down from 16.4 percent last month. Their outlook on the number of jobs also worsened.
Consumer spending on products has been falling fast in recent months as inflation and higher borrowing costs take a toll on Americans, particularly low-income families.
The Federal Reserve’s interest rate hikes aimed at taming inflation are slowing the economy. Banks are increasingly pulling back on commercial lending following the recent banking crisis, which will only slow the economy further.
Consumers’ outlook on inflation is unchanged from last month. Respondents predicted that prices will rise 6.2 percent over the next year. Prices rose 5 percent annually in March, according to Labor Department data.