US consumer confidence fell more than many predicted in April, fueled by a deterioration in expectations among Americans over 55 and households with annual incomes over $50,000, according to survey data released Tuesday.
The pessimistic results may ease some of the pressure on the Federal Reserve as it prepares to consider raising interest rates for the tenth time in a row next week in order to control rising prices.
The consumer confidence index fell in April to 101.3, down from a revised 104.0 in March, the Conference Board said in a statement. This was below the median forecast in a MarketWatch survey of economists.
Consumers’ expectations “fell and remain below the level which often signals a recession looming in the short term,” Ataman Ozyildirim, senior director of economics at The Conference Board, said in a statement.
“Compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months,” he said.
“They also expect fewer jobs to be available over the short term,” he added.
Consumer inflation expectations over the next 12 months remain “essentially unchanged” at 6.2 percent, Ozyildirim said.
In contrast to the pessimistic message on consumer confidence, new home sales in the United States defied expectations to hit a one-year high in March, the Commerce Department said Tuesday, as a lack of existing homes bolstered demand in the market for new properties.
Tuesday’s data release comes a week before the Fed meets to decide interest rates amid inflation which remains above its long-term target of two percent.
In recent weeks, a few members of the Fed’s rate-setting committee have suggested that the US central bank should lift its benchmark lending rate next week.
The vast majority of futures traders expect the Fed will raise rates by a quarter point next week, according to data from CME Group.