The Conference Board's consumer confidence index is down sharply to 97.0 in April after a downwardly revised 103.1 in March. The index is well below the consensus of 104.0 in the Econoday survey of forecasters and the lowest since 99.1 in October 2023. The index reflects decreased confidence for both the present situation and six-month outlook.

The present situation index is down to 142.9 in April after 146.8 in March and is the lowest since 136.5 in November 2023. Consumers are seeing some slowing in the job market and a flattening in inflation improvements. The expectations index is down to 66.4 in April after 74.0 in March and is the lowest since 66.4 in June 2022. Consumers are dealing with prospects of a weaker job market and lower wage gains, no relief in current interest rate levels, and worries that inflation is going to improve further. Probably also weighing on consumer expectations is a contentious political environment at home in a presidential election year and an unstable geopolitical situation.

The consumer confidence index is expected to hold mostly steady in April, at a consensus 104.0 versus 104.7 in March which compared with expectations for 106.7 and February's downward revised 104.8.

The Conference Board's confidence report surveys consumers on their assessments of the labor market, business activity, and their own financial conditions. The survey is conducted by Toluna, an online community platform. (Conference Board and Toluna)

The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer confidence index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.

Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.