Consumer confidence dipped slightly in April 2022 following an increase in March as worries about inflation and the Russia–Ukraine war continued to weigh the economy down, according to a survey conducted by The Conference Board.
Though the Present Situation Index declined, it still remains “quite high,” suggesting that the economy continued its expansion in the second quarter, said Lynn Franco, The Conference Board's senior director of economic indicators, in the press release.
The Expectations Index, though weak, did not deteriorate even amidst high prices at the gas pumps and Russia’s war in Ukraine, she said. And despite some cooling in vacation intentions, the intent to buy “big-ticket items” like appliances and automobiles “somewhat” increased.
“Still, purchasing intentions are down overall from recent levels as interest rates have begun rising. Meanwhile, concerns about inflation retreated from an all-time high in March but remained elevated. Looking ahead, inflation and the war in Ukraine will continue to pose downside risks to confidence and may further curb consumer spending this year,” Franco said.
Current business conditions were rated “good” by 20.8 percent of consumers, up from 19.6 percent in April, while 21.9 percent rated conditions as “bad," up from 21.4 percent. In the short term, 18.1 percent believe business conditions will improve, which is down from 19 percent, while 21.8 percent expect a worsening of business conditions, down from 24.1 percent in March.
In terms of short-term financial prospects, 16.5 percent of consumers believe their incomes will rise while 13.8 percent expect a decrease in income. The Conference Board's monthly consumer confidence survey is conducted online and published on the last Tuesday of every month.
The Consumer Price Index (CPI), a measure of inflation, rose by 8.5 percent for the 12-month period ending March 2022, the highest such increase since December 1981, according to the Bureau of Labor Statistics. The CPI for food prices jumped 8.8 percent in March as compared to the same month in 2021, according to the latest data from the U.S. Department of Agriculture.
With inflation at such high levels, consumers are turning pessimistic regarding the condition of the economy. Price hikes especially affect certain sections of society more than others.
Many middle and lower-income families are not in a financial position to own a home, which drives up the demand for rental properties and rental prices, he added.