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Consumer Confidence Declined Moderately in April

April 26, 2016

by Jill Mislinski

The latest Conference Board Consumer Confidence Index was released this morning based on data collected through April 14. The headline number of 94.2, was a decrease from the March final reading of 96.1, which is a downward revision from 96.2. Today's number was below the Investing.com forecast of 96.0.

Here is an excerpt from the Conference Board press release.

"Consumer confidence continued on its sideways path, posting a slight decline in April, following a modest gain in March," said Lynn Franco, Director of Economic Indicators at The Conference Board. "Consumers' assessment of current conditions improved, suggesting no slowing in economic growth. However, their expectations regarding the short-term have moderated, suggesting they do not foresee any pickup in momentum."

Putting the Latest Number in Context

The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.

Consumer Confidence

On a percentile basis, the latest reading is at the 48% level of all the monthly data points since June 1977. That's a decrease from 52% previous month.

For an additional perspective on consumer attitudes, see the most recent Reuters/University of Michigan Consumer Sentiment Index. Here is the chart from that post.

Consumer Sentiment

And finally, let's take a look at the correlation between consumer confidence and small business sentiment, the latter by way of the National Federation of Independent Business (NFIB) Small Business Optimism Index. As the chart illustrates, the two have tracked one another fairly closely since the onset of the Financial Crisis, although a bit of spread has appeared in the second half of 2015 and start of 2016.

NFIB Optimism and Consumer Confidence