Consumer Confidence Drops 5.1 Percent

Don Hogsett, May 2, 2005

Consumers grew increasingly antsy about the economy going forward, and a gauge of consumer confidence — a frequent precursor of consumer spending and retail sales — tumbled in April 5.1 percent, to a level of 97.7, down from 103 in March, The Conference Board reported.

"Less robust current conditions and a more cautious outlook have consumers feeling less confident in April than in March," said Lynn Franco, director of The Conference Board's Consumer Research Center. "Looking ahead, consumers do not anticipate an improvement in economic growth nor in their incomes. And they expect an even tighter job market over the summer months."

Consumers turned bearish on both current and future conditions, with their expectations for conditions six months out souring notably and falling to their lowest level in nearly two years, the business think tank reported.

Gauging current conditions, confidence slipped 2.9 percent, to a reading of 113.6 from 117 the month before. "Despite the decline, the Present Situation Index remains at levels indicative of a healthy economy," she said.

But the Expectations Index, said Franco, is now at its lowest level since July 2003, falling 6.9 percent to an April level of 87.2 from 93.7 in March, its lowest point since registering 86.3 in the summer of 2003.

The outlook for the next six months declined in April for a fourth straight month.

Confidence by region

Region % change
Source: The Conference Board
New England -28.3%
Middle Atlantic -6.1
East North Central -13.5
West North Central 12.0
South Atlantic -9.4
East South Central -4.7
West South Central -3.8
Mountain -2.0
Pacific -3.8

Buying plans April
Plans to purchase over the next six months

Source: The Conference Board
Homes 2.6%
Carpets -1.9
Cars 0.0
Major appliances 2.3
Vacation -2.3

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