U.S. consumer confidence index falls more than expected in April, remains near 12-year high

The U.S. Conference Board’s consumer confidence index dropped by more than anticipated in April. It fell from March’s 124.9 to 120.3, but it continues to stay near a 12-year high. Consensus expectations were for a more moderate correction after the strength seen in the recent months. Consensus projections were for the index to drop to 122.5.

The fall in the index was widespread, with consumer expectations dropping to 123 in April from March’s 112.3. The present situation index also dropped in the month to 140.6 from 143.9. Meanwhile, the labor market differential that gauges the net share of consumers that see employment as plentiful, also dropped to 11.7 from 12.8.

Household sentiment has rebounded at a robust rate since the presidential elections and indicates a buoyant consumer sector. But this strength has not been translated into a similar pickup in hard data on consumer spending so far in the first quarter of 2017, noted Barclays in a research report. The U.S. household sector is likely in strong footing and the first quarter weakness is expected to be temporary, added Barclays.

“Nevertheless, we view the sentiment data as likely to move down from its current elevated level”, added Barclays.