U.S. consumer confidence fell this month to the lowest level in four months, knocked down by a slowdown in hiring.
The Conference Board said Tuesday that its consumer confidence index fell to 95.2 in April from 101. 4 in March, the lowest reading since December's 93.1.
Consumers' assessment of current economic conditions fell for the third straight month, and their expectations for the future fell as well.
Lynn Franco, the Conference Board's director of economic indicators, blamed "the recent lackluster performance of the labor market." The American economy generated just 126,000 jobs last month, breaking a 12-month streak of at least 200,000 new jobs a month; 31 states registered job losses in March.
The drop was "mostly due to a degradation of job prospect optimism" agreed IHS Global Insight economist Chris Christopher in an e-mailed analysis. "The overall confidence levels for job prospects soured considerably, indicating the consumer mood is still in a fragile state. Since the beginning of the year, consumer confidence has been alternating in an up and down pattern. However, consumer confidence is currently more than 16% higher than April of last year, indicating that many households are enjoying lower gasoline prices."
Consumers' view of the current job market deteriorated in April. They were also more likely to say that there would be fewer jobs and that their own incomes would be lower in six months. The share saying they planned to buy a car or a major appliance within six months fell. The decline in confidence hit all age groups.
Also weighing on consumers' spirits: Gasoline prices, which tumbled to a nationwide average low of $2.03 a gallon in late January, have bounced back up to $2.55 a gallon, according to AAA. That may be dampening the desire and ability of Americans to go shopping. Still, gasoline prices were more than a $1 higher, or $3.70, a year ago.
Economists believe that overall economic growth slowed to between 1 percent and 1.5 percent in the January-March quarter. They are forecasting a rebound to growth of around 3 percent for the rest of this year. The economy grew 2.4 percent in 2014.
"We continue to expect real consumption growth to rebound to an annualized 3.5% rate in Q2 as weather effects subside, though this mornings’ report highlights the risk of a more modest rebound," Barclays Research economist Jesse Hurwitz wrote in an e-mailed report
Consumer spending accounts for about 70 percent of U.S. economic activity. Daniel Silver, an economist with J.P. Morgan, warned in a research report that "the recent weakening in confidence raises some questions about whether we will see real consumer spending accelerate as much as anticipated."
Despite the drop this month, the confidence index is well above April 2014's 81.7.