U.S. consumer confidence drops in April for the first time in seven months as inflation ticks up

U.S. consumer confidence dropped in April as inflation ticked up again and the stock market retreated from record highs, a new Gallup poll showed on Tuesday.

It's the first time in five months that the index it uses to track sentiment doesn't see an improvement and the first decline in seven months.

Gallup's index has a range of + and - 100, which would be reached if all Americans were optimistic or negative about the economic outlook. At the moment it's -29, compared to -20 in March. However, it's still far from the inter-annual low of -44 reached last April.

Overall, almost a quarter of adults (24%) said this month that economic conditions were excellent or good; 32% called them "only fair" and the remaining 44% labeled them as "poor."

"Excellent or good ratings decreased by six percentage points to 24% in April, while the percentage of Americans rating the economy as poor increased five points to 44%," Gallup explained.

Shortly after the poll was completed, stats showed that U.S. GDP decelerated to 1.6% in the first quarter of the year, compared to 3.4% in the last one of 2023.

Asked about whether they believe the economy is going in a good direction, 29% said things are getting better (down 4 percentage points compared to last month), and 67% said they're looking murkier.

Perspectives varied depending on political affiliation, with "supporters of the president's party assessing it much more positively than opponents of the president's party do."

"All party groups show declining confidence in the past month, though the change has been greater among Republicans and independents than Democrats. The three party groups remain more confident now than they were before confidence began picking up in December," Gallup added.

Democrats have a +31 index, compared to -77 for Republicans. Independents' results, in turn, were -38.

The poll's report highlighted that even though the current score is not promising for President Joe Biden, the index can change sharply in the span of a few months.

However, at the moment the current economic climate seems to be impacting his stance at the polls, with a recent study by Bloomberg and Morning Consult showing that his recent polling bump against presumptive GOP candidate Donald Trump has nearly disappeared in key battleground states as a result of this.

The poll found Biden is currently ahead in just one of the seven states most likely to determine the outcome of his matchup with Trump, leading in Michigan by 2 percentage points. Biden is slightly behind the former president in Pennsylvania and Wisconsin, with his deficit being larger in Georgia, Arizona, Nevada and North Carolina.

According to the poll, a majority of swing-state voters see worsening economic conditions in the coming months, with fewer than one in five saying they expect inflation and borrowing costs to be lower by the end of the year.