Americans' outlook for the world's largest economy improved slightly in April, despite ongoing concerns about inflation and the war in Ukraine, a survey released Tuesday said.
But with inflation at a 40-year high and drivers seeing soaring prices at the gas pump, feelings about the present situation worsened somewhat, according to The Conference Board's consumer confidence index.
Consumer confidence slipped to 107.3, just slightly below the March level of 107.6, while the present situation index dipped to 152.6 but the expectations index, based on consumers' short-term outlook for income, business and jobs, edged up to 76.7.
"Expectations, while still weak, did not deteriorate further amid high prices, especially at the gas pump and the war in Ukraine," said Lynn Franco, the institution's senior director of economic indicators.
And though views on the current situation fell, the indicator "remains quite high, suggesting the economy continued to expand in" the early months of the second quarter, Franco said in a statement.
While vacation intentions cooled, consumers' plans to buy big ticket items rose, and concerns about inflation retreated from an all-time level in March, the report said.
Franco cautioned that "inflation and the war in Ukraine will continue to pose downside risks to confidence and may further curb consumer spending this year."
Mahir Rasheed of Oxford Economics said expectations that inflation has peaked may inject optimism into US consumers, but cautioned that the descent will be slow.
"Confidence has held up relatively well in the face of elevated geopolitical disruptions and the fiery pace of price increases in recent months," he said in an analysis.
"A red-hot labor market and a more encouraging outlook suggests confidence should not deteriorate further unless risks metastasize in the months ahead."