April 2018 Consumer Attitudes

Consumers’ attitudes remained elevated in April 2018 according to two popular surveys despite some cooling in one.  Consumer Confidence from the Conference Board showed no fatigue in ebullience as it improved to 128.7 from the downwardly revised 127.0 (originally 127.7).  Consumer Sentiment from the University of Michigan edged down from a 14-year high in March of 101.4 to 98.8 to start the second quarter of this year; year-to-date, the school’s index has averaged 98.9 which is higher than any other year since 2000 when it’s mean reading hit 107.6.

Consumers surveyed by the Conference Board feel better about the here and now as well as the future.  Their present situation index rose from 158.1 to 159.6 due in part to the labor market.  A shrinking number of respondents consider jobs as “hard to get” which was also the case for those claiming business conditions are “bad.”  Looking out ahead, a growing number believe business conditions will improve over the next six months, while those expecting the conditions to worsen declined.

Those polled by the University were slightly less enthused about the economy but gave a strong reading nonetheless.  Expectations dipped marginally to 88.4 from 88.8 at the end of March.  This decline was coupled by a slowing current conditions tally.  Respondents to the school had some interesting unsolicited commentary as well.

The University released information on “spontaneous comments.”  When mentioning the recently enacted tax reform, comments were quite positive.  However, trade tariff editorializing was negative on balance.  Those giving unsolicited responses regarding the tax plan were more optimistic than those who did not mention it.  Likewise, folks noting opinions on tariffs were much more negative than respondents who did not bringing up trade. 

Americans remain confident in aggregate.  As demonstrated by those mentioning tariffs, the enthusiasm is not distributed evenly, but it outweighs pessimism.  This should keep the economy moving ahead because a confident consumer base is more likely to spend freely than one which is dour, and our economy depends on consumption for over two-thirds of output.