Consumer confidence in the U.S. deteriorated significantly in the month of April, according to a report released by the Conference Board on Tuesday, although the report also showed an improvement in consumer expectations.
The Conference Board said its consumer confidence index plunged to 86.9 in April after tumbling to a downwardly revised 118.8 in March. Economists had expected the index to plummet to 90.0 from the 120.0 originally reported for the previous month.
The steep drop by the headline index came as the present situation index showed a record nosedive to 76.4 in April from 166.7 in March.
Consumers saying current business conditions are “good” slumped to 20.8 percent from 39.2 percent, while those climbing conditions are “bad” spiked to 45.2 percent from 11.7 percent.
The report noted consumers’ assessment of the job market also eroded significantly, with those saying jobs are plentiful plunging to 20.0 percent from 43.3 percent and those saying jobs are “hard to get” surging up to 33.6 percent from 13.8 percent.
Meanwhile, the Conference Board said the expectations index climbed to 93.8 in April after falling sharply to 86.8 in March.
The rebound by the expectations index came as the percentage of consumers expecting business conditions will improve over the next six months jumped to 40.0 percent from 18.7 percent, although those expecting conditions will worsen also increased to 25.7 percent from 16.4 percent.
The outlook for the labor market was mixed, with the proportion expecting more jobs spiking to 41.0 percent from 16.9 percent, while those anticipating fewer jobs in the months ahead also increased to 20.8 percent from 17.6 percent.
“Consumers’ short-term expectations for the economy and labor market improved, likely prompted by the possibility that stay-at-home restrictions will loosen soon, along with a re-opening of the economy,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.
“However, consumers were less optimistic about their financial prospects and this could have repercussions for spending as the recovery takes hold,” she added. “The uncertainty of the economic effects of COVID-19 will likely cause expectations to fluctuate in the months ahead.”
Last Friday, the University of Michigan released a separate report showing a modest upward revision to its reading on consumer sentiment in the month of April.
The consumer sentiment index for April was upwardly revised to 71.8 from the preliminary reading of 71.0 but remained down sharply from the final March reading of 89.1.