“Claman Countdown” panelists Gary Cartbaum and Jeffsika discuss the performance and consumer sentiment of retail stocks.
Consumer confidence fell to its lowest level in almost five years in April as concerns about tariffs and trade uncertainty placed emphasis on economic outlook.
The conference committee said Tuesday its consumer confidence index fell 7.9 points to 86 in April, the lowest read since May 2020. The economists voted by Reuters predicted the index would slide to 87.5.
The expectations index, based on a short-term outlook for consumer revenue, business and labor market conditions, was the lowest since October 2011, falling 12.5 points to 54.4, well below the 80 threshold, which is a typical recession. The current situation index is based on consumer ratings of current business and labor market conditions, down 0.9 points to 133.5.
“We are pleased to announce that we are a global indicator of the conference committee,” said Stephanie Gyade, Senior Economist, the conference committee's global indicator.
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The conference committee's consumer confidence index has fallen to its lowest level in five years. (Reuters//Eduard Munoz/Reuters)
“The decline was driven primarily by consumer expectations. The three expectations factors (business conditions, employment outlook, future income) all deteriorated sharply, reflecting the prevailing pessimism about the future,” Guichard explained. “In particular, the share of consumers, who expected to see less work in the next six months (32.1%), was just as high as in April 2009, in the midst of the Great Recession.”
Guichard added, “In April, the expectations for inflation averaged 12 months reached 7%, reaching the highest point in which the US had experienced extremely high inflation since November 2022.”
Since the questions were first asked in 2022, consumer ratings of the family's expected financial situation have fallen to the lowest level.
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Consumers showed higher expectations of inflation and increased likelihood of recession. (Allen J. Schaben / Los Angeles Times Getty Images / Getty Images)
Furthermore, the likelihood of a US recession over the next 12 months has risen from about 65% in December and January to 72% in April.
The consumer confidence report, ahead of the government's report on economic growth scheduled for Wednesday, is expected to mark a sharp slowdown in first quarter growth as businesses increased imports due to prior and post-duty costs.
GDP may have risen at an annual rate of 0.3% in the first quarter. This took place from January to March. This is the weakest since the second quarter of 2022, Reuters survey shows.
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The risk is leaning towards the downside, with the Atlanta Federal Reserve forecast GDP falling at a rate of 0.4% after adjusting for gold imports and exports. The economy grew at a 2.4% pace in the fourth quarter.
Reuters contributed to this report.
