Confidence among consumers fell in April to a three-month low as Americans grew more pessimistic about the outlook for the economy.
Bloomberg reported that the Thomson Reuters/University of Michigan final index of consumer sentiment declined less than forecast, to 76.4 from 78.6 a month earlier. The median projection in a Bloomberg survey was 73.5 after a preliminary April reading of 72.3.
The figures indicate consumer spending may cool after climbing in the first quarter by the most since the end of 2010 and slow the pace of economic growth. Safeway Inc. is among companies noting that shoppers, faced with higher payroll taxes and limited job growth, remain cost-conscious even as rebounding home prices help stabilize household wealth.
“We are seeing slightly softer growth but on the other hand household wealth looks pretty good,” Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh, said before the report. “The economy is continuing to expand but we do have some drags.”
Another report today from the Commerce Department showed the economy expanded in the first quarter at a 2.5 percent annualized rate, up from the 0.4 percent pace in the final three months of 2012. Household purchases, which account for about 70 percent of the economy, advanced at a 3.2 percent annualized rate, the most since the fourth quarter of 2010.
Forecasts for consumer sentiment in the Bloomberg survey ranged from 70 to 80. The index averaged 64.2 during the recession that ended in June 2009 and 89 in the five years prior to the 18-month slump.