Highlights

The Conference Board’s Consumer Confidence Index was nearly unchanged in April, falling from a downwardly revised 69.5 (from 70.2) in March to 69.2. The Briefing.com consensus pegged the index at 69.5.

Key Factors

Unlike the preliminary reading for the University of Michigan Consumer Sentiment Index, the decline in sentiment came from a drop in the Expectations Index (81.1 from 82.5) and not from the Present Situation Index (51.4 from 49.9).
That means consumers are concerned that recent declines in equity prices and softening labor reports will worsen -- and drag the economy lower.
The drop in sentiment does not affect our consumption outlook. Consumption growth is reliant upon income growth. As long as the employment numbers return to an upward moving track, consumption growth will follow suit regardless of the performance of the confidence/sentiment indicators.

Consumer sentiment/confidence indices get way too much attention. The simple fact is that sentiment does not correlate strongly with consumer spending and thus has little predictive value. Consumer spending correlates more closely with income. Sentiment tends to reflect well known factors such as unemployment rates and gas prices more than it predicts future spending patterns.

Category	APR	MAR	FEB	JAN	DEC
Conference Board	69.2	69.5	71.6	61.5	64.8
Expectations	81.1	82.5	88.4	76.7	77.0
Present Situation	51.4	49.9	46.4	38.8	46.5
Employment ('plentiful' less 'hard to get')	-29.1	-31.7	-31.6	-37.1	-35.0
1 yr inflation expectations	5.8%	6.2%	5.5%	5.5%	5.4%