WASHINGTON: US consumer confidence retreated in April after two months of records, as optimism about the economy dwindled, the Conference Board reported on Tuesday (Apr 25).
Consumers were less optimistic about the outlook in the short-term, while a growing percentage felt business conditions were bad, according to the monthly survey.
The index slipped to 120.3 from 124.9 in March, when confidence hit a 16-year high. A key component of the index, measuring views on the present situation, dropped to 140.6 from 143.9.
President Donald Trump's election in November sparked a wave of economic optimism on hopes for his aggressively pro-growth agenda of tax cuts, slashed regulation and infrastructure spending. But as Trump approaches his first 100 days, the political reality that putting the agenda into action will be difficult is setting in.
Despite the decline, consumer confidence "still remains at strong levels," said Lynn Franco, the Conference Board's director of economic indicators.
"Consumers assessed current business conditions and, to a lesser extent, the labour market less favourably than in March."
Analysts had expected a much smaller decline, to 122.3, according to a consensus forecast.
Those surveyed who said business conditions are "good" declined to 30.2 per cent from 32.4 per cent, while those saying conditions are "bad" rose slightly to 13.8 per cent from 13.1.
And despite consistently solid employment data, consumers' assessment of the labor market was moderately less favourable. Those stating jobs are "plentiful" declined to 30.8 per cent from 31.8 per cent, while those claiming jobs are "hard to get" was virtually unchanged at 19.1 per cent.
Likewise, measures for the outlook for business conditions and the labor market over the next six months were less optimistic, the survey showed.
Despite the decline, Ian Shepherdson of Pantheon Macroeconomics, said the figures seem more realistic than last month.
"The March reading always looked overcooked relative to other surveys, so we regard this decline as a correction rather than the start of a sustained weakening," he said in a research note.