The consumer confidence index dipped to 82.3 this month from 83.9 in the prior month, according to the nonprofit Conference Board, publisher of the report. Wall Street had expected a small increase.
Yet an upward revision in March marked the index’s highest level since January 2008, one month after the start of the Great Recession. The back-to-back readings in March and April are also the best since the recovery began.
The rising level of confidence, however, still doesn’t come close to matching the conditions that prevailed before the nation’s worst economic downturn since the Great Depression in the 1930s. The confidence index, for example, averaged a much higher 103.4 from 2000 to 2007.
Most economists believe U.S. growth and hiring will accelerate in the second half of 2014, and if so, that could nudge confidence even higher. But forecasts of faster growth have been dashed repeatedly since the recovery began in mid-2009.
The small drop in confidence stemmed entirely from consumers’ assessment of current conditions. The so-called present situation index fell to 78.3 from 82.5, marking the lowest level since January.
Fewer Americans thought jobs were “plentiful” (12.9% vs. 13.8%), and more said jobs were harder to get (32.5% vs. 31.4%). It’s the first time the hard-to-get figure has risen since last October.
Consumers were also slightly more pessimistic about business conditions.
Other employment data, however, suggests the labor market has improved. Jobless claims, a proxy for layoffs, remain near a post-recession low. And hiring bounced back in March and February after softening toward the end of 2013. Most economists also expect a strong pickup in job creation in April when the government releases the monthly employment report on Friday.
Meanwhile, the expectations index — a look at what consumers expect in the next six months — was virtually unchanged at 84.9.
“While sentiment regarding current conditions may have slipped a bit, consumers do not foresee the economy, or the labor market, losing the momentum that has been building up over the past several months,” said Lynn Franco, director of economic indicators at board.