Public's optimism down in early April
USA Today
WASHINGTON — Consumers grew gloomier again in early April, as anxiety about jobs and general business conditions ended March's brief outbreak of optimism and renewed fears that consumer spending could shrink.
The Conference Board's closely watched consumer confidence index fell to 109.2 in April, exactly where it was in February before improving consumer moods bumped it up to 116.9 in March.
Economists have been closely monitoring gauges of consumer mood since Federal Reserve Chairman Alan Greenspan said in January that consumer confidence was the economy's last bulwark against a recession. But analysts disagree about whether the April drop is worrisome.
"These numbers do not look bad to us," says Ian Shepherdson of High Frequency Economics, noting that the drop merely puts the index back where it was in February. "The big plunge looks to be over."
But David Orr, chief economist for First Union, says the April drop "is considerably more ominous" than previous declines, because most of it came in consumer attitudes toward their current conditions, which Orr says are a crucial bellwether for consumer spending.
Until now, the worst declines have come in consumers' expectations about what the economy would be like in six months. That "expectations" index has fallen to levels usually seen before a recession, says Lynn Franco, who directs the monthly confidence survey.
The Conference Board completed its survey April 17, the day before the Fed reduced interest rates and sent stocks soaring.
