U.S. consumer confidence plunged in April as millions lost their jobs and there was an unprecedented deterioration of an index that monitors their attitudes about current business and work conditions.
The Conference Board said Tuesday that its confidence index tumbled to a reading of 86.9, the lowest level in nearly six years and down from 118.8 in March. The index is composed of consumers’ assessment of present conditions and expectations about the future.
The share of people saying that jobs are “plentiful” was more than halved, to 20% in April. The March reading was 43.3%. The share indicating jobs are ‘hard to get’ rose to 33.6%, from 13.8% in March.
The present conditions index slumped from 166.7, to 76.4, an unprecedented 90-point drop. The expectations index, based on the future outlook, improved slightly from 86.8 in March to 93.8 in April.
The numbers in the present conditions index “reflects the sharp contraction in economic activity and surge in unemployment claims,” said Lynn Franco, senior director of economic indicators at the Conference Board.
Kathy Bostjancic, chief U.S. financial economist at Oxford Economics, said the confidence declines were worrisome because “consumers’ downbeat views about future income prospects can restrain consumer spending and the overall economy.”
Consumers drive about 70% of all economic activity in the U.S.
Many economists believe the country has already entered a recession that will be the largest economic disruption since the Great Depression of the 1930s.