Consumers aren't feeling better about the economy this month: they're feeling worse. That's what the Thomson Reuters/University of Michigan survey of consumer confidence says. Earlier this week, the market cheered better-than-expected sales data for March. This, in conjunction with better consumer confidence levels last month, appeared to indicate that Americans were feeling more optimistic about the economy. The Reuters/U-Michigan survey indicates the positive trend may have reversed this month.
The surveys' overall index on consumer sentiments slipped to 69.5 in early April -- the lowest in five months. This was below the 73.6 reading seen at the end of March and the 75.0 median forecast of analysts polled by Reuters.
That's certainly not good news for the hope that better-than-expected March indicators were forming a new trend signaling economic recovery. In fact, consumers may have taken a step back. Reuters says that this change was driven by Americans hearing more negative information about government programs and perceiving that the recovery is too slow. They also hold negative views of their income and job prospects.
This is a little surprising, since the vast majority of economic reports issued thus far in April have painted a cheerful picture about March. Other than sales and consumer confidence, other positive news included legitimate job growth, a low inventory-to-sales ratio, virtually non-existent inflation, and increased pending home sales. The negative news was mostly limited to foreclosures and the government's struggle modifying mortgages.
The Reuters/U-Michigan index's April decline refutes the relatively strong positive sentiment expressed through Rasmussen's consumer index for this month. We may have to wait for the Conference Board's reading on consumer confidence at month's end to settle the dispute.