Tuesday, April 26, 2005

April consumer confidence drops


April consumer confidence drops

Key index sees third straight monthly decline

The Associated Press
Updated: 12:12 p.m. ET April 26, 2005

NEW YORK - Consumer confidence declined in April for the third consecutive month, signaling Americans’ concerns that economic growth is leveling off.

The Conference Board said Tuesday that its Consumer Confidence Index fell 5.3 points to 97.7 for April, down from a revised reading of 103.0 in March. The new reading was slightly lower than the 98.0 forecast by analysts.

The new figure takes the index to its lowest point since last November, when it registered 92.6.

“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 New York-based 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,” Franco said.

While the overall reading on confidence fell, a component index measuring consumers’ view of the current economy is still at a level reflecting a fairly healthy business climate, said the Board, a private research group.

But a sub-index measuring consumers’ expectations for the coming months fell to its lowest level since July 2003, pointing to growing doubts about where the economy is headed, the Board said.

Economists keep a close watch on consumer confidence because consumer spending accounts for two-thirds of all U.S. economic activity. The Conference Board’s index is based on responses from a representative sample of 5,000 households, surveyed through April 19.

The Conference Board said its expectations index declined for the fourth consecutive month, falling to 87.2 from 93.7. The number of consumers expecting business conditions to improve fell to 17.8 percent from 19.3 percent. Those expecting conditions to worse rose to 9.7 percent from 8.2 percent.

Consumers expecting more jobs in coming months declined to 14.2 percent from 15.1 percent. Those expecting fewer jobs increased to 18.0 percent from 15.8 percent.

Meanwhile, just 16.3 percent of those surveyed expect their incomes to rise in the next few months, down from 17.2 percent.