Inflation, the fastest since 1981, is increasingly taking a bite out of American paychecks.
US consumer confidence weakened in April as views on current conditions deteriorated slightly, eradicating more optimistic expectations for the future.
The Conference Board Index fell to 107.3 from an upwardly revised reading of 107.6 in March. The median forecast in a Bloomberg poll of economists called for a reading of 108.2.
Inflation — the fastest since 1981 — is increasingly eroding paychecks, and more dollars are being spent on basic necessities like food, gas and shelter. While consumers have so far been stubborn and continue to spend, some economists fear demand will eventually slow to the point where a recession could be triggered. Inflation-adjusted spending data will be released on Friday.
Still, Americans are experiencing one of the hottest job markets in decades, characterized by low unemployment and high labor demand that is pushing up wages. The economy likely had another solid month of job growth in April ahead of next week’s government data, according to a Bloomberg survey.
The Conference Board rated Current Conditions at 152.6 while the Expectations Index improved to 77.2.
“Concerns about inflation receded from an all-time high in March but remained elevated,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement.
“Looking ahead, inflation and the war in Ukraine will continue to pose downside risks to confidence and will continue to dampen consumer spending this year,” she said.
Respondents’ opinions on the current business situation were mixed and views on the labor market – although still very optimistic – calmed down somewhat.
–With support from Chris Middleton.
Comments are closed.