U.S. Consumer Confidence Edge Up Despite Mideast Conflict

(MENAFN) U.S. consumer confidence inched higher in April even as spiraling energy costs tied to the Middle East conflict continued to weigh heavily on the American public's economic outlook, data published Tuesday by The Conference Board showed.

The Consumer Confidence Index nudged up to 92.8 in April from a revised 92.2 in March — a fractional gain that masked deepening divergences beneath the headline figure. The Present Situation Index, which gauges consumers' views on prevailing business and labor conditions, slipped 0.3 points to 123.8. Conversely, the Expectations Index — which captures short-term consumer outlooks on income, business activity, and employment — climbed 1.2 points to 72.2.

The Conference Board's chief economist Dana Peterson framed the result in cautious terms: "Consumer confidence edged up in April but was overall little changed, despite material concern about rising gasoline prices as the war in the Middle East prompted a surge in Brent crude oil prices."

Peterson elaborated on the underlying currents driving the split reading: "Consumer appraisals of current and expected business conditions declined moderately compared to last month. This was offset by modest improvements in consumers' perceptions of the labor market, both current and expected, as well as income expectations, which were slightly more optimistic in April."

A far grimmer assessment emerged from a separate survey. The University of Michigan's Consumer Sentiment Index, released Friday, tumbled to 49.8 in April from 53.3 the prior month — a historic low that eclipses the previous record bottom of 50 set in June 2022 amid a punishing inflation episode. The deterioration came as no surprise to close observers, as a preliminary April reading of 47.6 had already foreshadowed significant weakness in public sentiment.

The widening gap between the two measures reflects broader uncertainty gripping global markets. Carsten Brzeski, global head of macro at ING, issued a stark warning on the economic consequences of the prolonged regional conflict: "We're not yet predicting a recession, but it's going to hammer growth and increase inflation." He tempered any expectation of precise forecasting, adding: "Accurately predicting what's going to happen next, however, is a fool's game."

The mixed confidence data lands as financial markets remain acutely focused on diplomatic developments surrounding the Iran conflict and the prospective reopening of the Strait of Hormuz — a critical global shipping chokepoint whose continued disruption has pushed oil prices sharply higher and added fresh momentum to inflationary pressures worldwide.

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