The Conference Board said consumers may be cutting back on big-ticket items amid concerns about a possible recession. File photo by James Atoa/UPI | license photo
April 25 (UPI) — US consumer expectations suggest a recession is on the horizon, survey results released Tuesday by The Conference Board show.
The non-profit business research organization, indices to reflect current sentiment, as well as future expectations, show that pessimism is entrenched.
The organization said its Consumer Confidence Index fell to 101.3 in April, from 104 in March, while its Expectations Index, which is based on near-term consumer expectations about business income and working conditions, fell to 68.1.
He noted that the expectations index has remained below 80, a point associated with a next recession since February 2022.
“Compared to last month, fewer households expect business conditions to improve and more expect conditions to worsen over the next six months,” said Ataman Ozyildirim, senior director of economics at The Conference Board. “They also expect fewer jobs to be available in the short term.”
TO official recession it would be determined by the nonprofit National Bureau of Economic Research, which takes into account everything from gross domestic product to employment when considering the designation.
US GDP hasn’t dipped into the negativity, although hiring is softening a bit.
Today, 48.4% of those surveyed by The Conference Board said jobs were “plentiful,” an improvement of half a percent from last month. However, only 12.5% of respondents said they expected more jobs in the near term, up from 15.5% last month.
On inflation, consumers said they expected the rate to be 6.2% over the next 12 months. Federal data shows that consumer-level inflation is closer to 5% per year, although the Federal Reserve is expected to keep raising interest rates until it approaches its 2% target rate.
Higher loan rates make big-ticket items more expensive and, in some cases, out of reach for many consumers.
“Overall home, car, appliance and vacation purchase plans were cut in April, a sign that consumers may be economizing amid mounting pessimism,” Ozyildirim said.
The Fed meets next week to consider its next move in the fight against inflation.