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The numbers: A survey of consumer confidence dipped in April to 107.3 from 107.6, but Americans signaled they are optimistic enough about the economy to keep buying big-ticket items such as news cars and appliances.
Economists polled by The Wall Street Journal had forecast the index to total 108.5.
Consumer confidence fell early in the year after the Omicron viral outbreak, and later the war in Ukraine and soaring inflation added to the angst. High gasoline prices have particularly vexed Americans.
Big picture: The U.S. economy is still expanding at a steady pace and the chance of recession appears low for now. The labor market is on fire, consumers are spending plenty of money and business investment and production are strong.
Worries about high inflation, a problem exacerbated by the war in Ukraine and Chinese lockdowns, is the biggest obstacle for the economy.
The Federal Reserve is planning to sharply raise interest rates by the end of the year to contain inflation and that could also slow the economy down.
Key details: A measure of how consumers feel about the economy right now slid to 152.6 from from an eight-month high of 153.8 in March, The Conference Board said Tuesday.
Yet a similar gauge that looks ahead six months rose to 77.2 from 76.7, indicating a bit more cautious optimism about the future path of the economy.
“Expectations, while still weak, did not deteriorate further amid high prices, especially at the gas pump, and the war in Ukraine,” said Lynn Franco, senior director of economic indicators at the board. “Vacation intentions cooled but intentions to buy big-ticket items like automobiles and many appliances rose somewhat.”
Looking ahead: “Confidence has held up relatively well in the face of elevated geopolitical disruptions and the fiery pace of price increases in recent months,” said Mahir Rasheed, U.S. economist at Oxford Economics.
“A red-hot labor market and a more encouraging outlook suggests confidence should not deteriorate further unless risks metastasize in the months ahead.”
Market reaction: In early trades, the Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
fell in Tuesday trades.
Stocks have pulled back recently due to signals from the Federal Reserve that it plans to raise interest rates rapidly to try to tame inflation.
