Foul Moods

The S&P 500 fell 1.6% today mostly because First Republic's earnings report reminded investors that the banking crisis may not be over yet. That put them in a foul mood all day. Consumers are also in a foul mood: The Conference Board said its consumer confidence index fell to 101.3 in April, the lowest reading since July 2022, from 104.0 in March. Consumers' assessment of current conditions improved, but their expectations worsened (chart).

Consumers' pessimism about the future probably reflects their ongoing concerns about inflation and their new concerns about the banking crisis. On the other hand, their upbeat assessment of current conditions undoubtedly reflects the ongoing strength in the labor market. The percent of respondents agreeing that jobs are plentiful remained high at 46.4%, while only 11.1% agreed that jobs are hard to get (chart). There's no recession in those numbers.