American consumer sentiment took an unexpected plunge in April as the view of the job market now and in six months deteriorated.
The Consumer Confidence Index from the Conference Board slipped to 95.2 this month from March’s revised 101.4 score. Analysts surveyed by Bloomberg had predicted an increase to 102.2. It was the lowest reading this year, below the most negative survey response, and the biggest miss on expectation in five years. Sentiment though remains above the post-recession average of 68.4 and the 30 year average of 92.48.
The number of people who said that jobs were plentiful dropped to its lowest in four months, while those who stated that jobs were hard to find rose to its highest level this year. Income expectations were also diminished with those anticipating higher income in six months declining and those predictions lower wages at the highest level since last October.
The March non-farm payrolls at 129,000, half the expectation, were the smallest in 15 months. And while new jobs in April are predicted to move back over 200,000, weak wage growth, just 2.1 percent annually in March despite more than a year of strong payrolls, has belied predictions that a tightening labor market would bring salary increases and may be taking a toll on consumer optimism.
"Consumer confidence, which had rebounded in March, gave back all of the gain and more in April," noted Lynn Franco, director of economic indicators at the Conference board.
Consumer satisfaction with their day to day situation fell to 106.80 in April from 109.50 the prior month. It was the third decline in a row. Nonetheless this year has seen a small boom in consumer sentiment, with the 110.6 average since December the best reading since the last four months of 2007.
Consumer confidence in their economic situation in six months decreased to 87.5 in April from 96.0 in March for the biggest one month decline in a year and a half and the lowest level since last September.
The number of Americans who said they had plans to buy a range of big ticket items from cars to appliances, TVs and refrigerators declined. Those who said business conditions were good dropped slightly but those who said conditions were bad declined as well and the number of people calling conditions normal gained. Folks anticipating better business conditions in six month fell and those predicting worse conditions in a half year climbed.
Feeling about the labor market slipped. More jobs in six month were forecast by fewer people and less labor market opportunity was expected by a greater number of people. Likewise fewer people expected a rise in their income and more expected a decline.
Confidence dropped among all age groups with the largest fall among under 35. The economic view was more varied when divided by income. Those who made less than $15,000 a year and between $35,000 and $50,000 thought their outlook had improved though by a modest amount, while all other groups felt things has gotten worse.
The New England and the West south Central regions of the country saw the largest drop in confidence.
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