United States consumer confidence rose again in April for the second month in a row, reaching the highest level since February 2020 before the coronavirus pandemic hit the nation and devastated the economy.
The Conference Board Consumer Confidence Index reported high numbers for the month of April. The board reported that the Index is now at 121.7, an increase from 109.0 in March. Other measurements grew, as well, including the Present Situation Index, which is “based on consumers’ assessment of current business and labor market conditions” and the Expectations Index, which is “based on consumers’ short-term outlook for income, business, and labor market conditions[.]” The Present Situation Index rose from 110.1 to 139.6 and the Expectations Index went up slightly from 108.3 in March to 109.8 in April.
“Consumer confidence has rebounded sharply over the last two months and is now at its highest level since February 2020,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved significantly in April, suggesting the economic recovery strengthened further in early Q2. Consumers’ optimism about the short-term outlook held steady this month. Consumers were more upbeat about their income prospects, perhaps due to the improving job market and the recent round of stimulus checks. Short-term inflation expectations held steady in April, but remain elevated. Vacation intentions posted a healthy increase, likely boosted by the accelerating vaccine rollout and further loosening of pandemic restrictions.”
Consumers’ feelings about the current conditions went up a significant amount this month. The Conference Board reported:
The percentage of consumers claiming business conditions are “good” increased from 18.3 percent to 23.3 percent, while the proportion claiming business conditions are “bad” fell from 30.1 percent to 24.8 percent. Consumers’ assessment of the labor market also improved. The percentage of consumers saying jobs are “plentiful” increased from 26.5 percent to 37.9 percent, while those claiming jobs are “hard to get” declined from 18.5 percent to 13.2 percent.
Consumers’ hopes about the short-term standing went up slightly. The percentage of consumers who anticipate business conditions getting better over the next six months went up moderately from 40.3% to 40.5%, “while the proportion expecting business conditions to worsen stood relatively unchanged at 11.9 percent.”
Consumers’ view of the job market were slightly less optimistic. “The proportion expecting more jobs in the months ahead fell from 35.9 percent to 34.5 percent, while those anticipating fewer jobs rose from 14.4 percent to 15.5 percent,” the report stated. “Regarding short-term income prospects, 17.9 percent of consumers expect their incomes to increase in the next six months, up from 15.4 percent in March. Those expecting their incomes to decrease fell to 10.9 percent, down from 12.6 percent.”
According to The Associated Press, economists think that the rise in consumer confidence will boost general economic growth as consumers, who make up 70% of economic activity, increase their spending as lockdown restrictions are alleviated.
The Consumer Confidence Survey shows current business conditions and probable developments for future months. The website states: “This monthly report details consumer attitude, buying intentions, vacation plans and consumer expectation for inflation, stock prices and interest rates. Data are data available by age, income, region and top 8 states.”