Confidence among U.S. consumers fell in April from a six-year high as Americans became less enthusiastic about hiring and business conditions, even as many said they think the economy will strengthen in the months ahead.
The Conference Board’s index decreased from 83.9 to 82.3 but remained stronger than initially estimated, the New York-based private research group said Tuesday. The median forecast in a Bloomberg survey of 78 economists called for a reading of 83.2.
Limited gains in the stock market this year, rising prices at the gas pump and a slow-down in the housing market tied in part to higher interest rates are leaving Americans less optimistic about their finances. At the same time, more anticipated an increase in employment opportunities in the next six months, which would help keep sentiment and consumer spending from faltering.
“Consumer attitudes in this cycle, as have so many things, have kind of lagged what we would consider to be normal in the mature phase of a recovery,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Conn., whose projection of an 82 reading was among the closest in the Bloomberg survey.
Despite the decline, consumer sentiment for the past two months remains at its strongest levels since January 2008, when the recession was just beginning. The Conference Board’s measure averaged 53.7 in the recession that ended in June 2009 and has averaged 63.2 during the expansion.
Consumer confidence is closely watched because consumer spending accounts for about 70 percent of the U.S. economy.
Although consumers are a bit more downbeat about existing economic conditions, their outlook for future growth held steady, said Conference Board economist Lynn Franco. The expectations component of the index rose to an eight-month high in April.
The April consumer sentiment report showed that households with incomes of more than $125,000 continue to have the most confidence in the economy, as do people younger than 35.
Plans to buy autos and appliances fell in April, while slightly more Americans are considering whether to buy a home, according to the report.
Those purchases could be influenced by interest rates: The Federal Reserve has held rates near historic lows, though mortgage rates have increased over the past year.
At its December, January and March meetings, the Fed trimmed its monthly bond purchases intended to keep long-term rates low because it deems the recovery to have strengthened.
Fed officials are meeting this week and are expected to further reduce their monthly bond purchases.
The share of respondents who said they expected their incomes to rise increased to an eight-month high of 17.1 percent in April from 15.3 percent a month earlier. The proportion of Americans who said jobs would become more plentiful in the next six months climbed to 15 percent from 14.1 percent.
Payrolls climbed by 192,000 workers in March after a 197,000 increase the previous month that was larger than first estimated, the Labor Department said earlier this month.
The Labor Department will release its April employment report on Friday.
A separate report Tuesday showed property values cooled in February.
The Standard & Poor’s/Case-Shiller 20-city home price index rose 12.9 percent in February compared with 12 months earlier. While healthy, that is down from a 13.2 percent gain in January.
Home prices fell in 13 of the 20 cities in February compared with the previous month. The index is not adjusted for seasonal variations, so those declines partly reflect weaker sales in the winter.
Information for this article was contributed by Michelle Jamrisko and Chris Middleton of Bloomberg News and by Josh Boak and Christopher S. Rugaber of The Associated Press.
Business, Pages 27 on 04/30/2014