The U.S. consumer confidence slightly decreased in April but remains high despite inflation continuing to cloud their optimism for the rest of the year.
Last Tuesday, the Conference Board said its consumer confidence index, which accounts for consumers’ assessment of current conditions and future outlook, lessened to 107.3 this April compared to the 107.6 in March.
The business research group’s present situation index that measures consumers’ assessment of current conditions in business and labor also slightly dipped from 153.8 in March to 152.6 this month.
Meanwhile, the expectations index, based on consumers’ six-month outlook for income, business, and labor market conditions, increased from 16.7 last month to 77.2 this April. It once stood at 80.8 last February and remained the weakest number in the survey.
“Purchasing intentions are down overall from recent levels as interest rates have begun rising,” said Lynn Franco, the Conference Board’s senior director of economic indicators. “Meanwhile, concerns about inflation retreated from an all-time high in March but remained elevated.”
Franco said the inflation and the war in Ukraine would continue to “eat into confidence” and might further impact consumer spending throughout the year.
Inflation rose over the past year at its fastest pace for over 40 years, with food costs, gasoline, housing, and other necessities negatively impacting American consumers and denying their pay raises.
According to the index, Americans have rushed some vacation plans. However, they slightly have more intention to make big purchases like a car or major appliances.
The Federal Reserve increased its main borrowing point by a quarter last month to be the primary tool to fight inflation. With possible half-point increases, multiple rate hikes can be expected this year.
The Labor Department said its consumer price index jumped to 8.5% this March compared to the year prior, making it the sharpest year-to-year increase since 1981. Due to disrupted supply chains, strong consumer demand, and erratic global food and energy markets, prices drove up, worsened by the Russian-Ukrainian War.
Consumers were slightly less optimistic about the labor market, despite U.S. employers adding at least 400,000 jobs for 11 straight months knocking down the employment rate by 3.6%. It is the lowest unemployment rate since the pandemic started two years ago and just above the half-century low of 3.5% reached in 2020.
This article originally appeared on AP News.
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