Today's report of Consumer Confidence for the month of April came in at 69.2, which was slightly weaker than expected (69.6) and down modestly from last month's downward revised reading of 69.5.
One interesting aspect of the Consumer Confidence report is the spread between those Americans making more than $50K per year and those making between $35K and $50K per year. It is no surprise that Americans with higher incomes are typically more confident than Americans with lower incomes. What is noteworthy, however, is the growing divergence in confidence between the two groups. Although the current six month average reading is down sharply from last May's record high reading, since the early 1990s there has been a clear trend higher in this spread.
The two charts below show the historical levels of the percentage of Americans expecting higher and lower stock prices and interest rates. Currently, 35.7% of those asked expect stock prices to rise, while 29.1% see stock prices falling. For those looking for comparisons to last year, this marks the second straight month where more people expect stock prices to rise than decline. The last time this occurred was back in April 2011. The lower chart shows the percentage of consumers expecting higher and lower interest rates. Just as more Americans expect higher stock prices than lower prices, more Americans also see interest rates rising versus falling. It has now been 36 straight months that at least 40% of consumers have been expecting higher interest rates. The last time this number was less than 40% was back in April 2009 when the 10-Year US Treasury was yielding about 3.2%. Today the 10-year is yielding under 2%.
