U.S. consumer confidence inched up slightly in April amid a rally in share prices following a ceasefire in the war with Iran and improved perceptions of the labor market, according to The Conference Board. The improvement came despite concerns about the conflict in the Middle East and rising gas prices.

The Conference Board’s monthly Consumer Confidence Index increased to 92.8 in April from an upwardly revised 92.2 in March. The survey period was April 1-22, which included the temporary two-week ceasefire in the Middle East conflict that began on April 8, and the rebound in U.S. equities that followed, said The Conference Board.

Economists polled by Reuters had forecast the index easing to ​89.0

The Conference Board’s Present Situation Index, which measures consumers’ current view of business and labor market conditions, slipped to 123.8 in April from an upwardly revised 123.5 in March.

The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—rose by 1.2 points to 72.2 from an upwardly revised 71 in March.

“Consumer confidence edged up in April but was overall little changed, despite material concern about rising gasoline prices as the war in the Middle East prompted a surge in Brent crude oil prices,” said Dana M Peterson, chief economist, The Conference Board. “Consumer appraisals of current and expected business conditions declined moderately compared to last month. This was offset by modest improvements in consumers’ perceptions of the labor market, both current and expected, as well as income expectations, which were slightly more optimistic in April.”

The Present Situation Index cooled slightly in April, as net views of current business conditions (the share saying conditions are “good” versus “bad”) fell by 1.8 ppts to +4.1 percent. Perceptions of employment conditions improved slightly, with the labor market differential—the share of consumers saying jobs are “plentiful” minus the share saying jobs are “hard to get”—ticking up by 1.4 ppts to +7.5 percent. The Expectations Index increased by 1.2 points in April, as two of its three components—net perceptions of labor market and household income conditions six months from now—edged up. Expected business conditions were slightly more pessimistic.

Among demographic groups, confidence continued to trend downward on a six-month moving average basis for consumers aged 35 and up while younger consumers were a tad more confident in April. Respondents under 35 remained the most optimistic and those 55 and over the least.

On a six-month moving average basis, confidence improved among Millennials and Gen Z but declined among older generations. By income, confidence on a six-month moving average basis varied, but most income groups expressed less optimism. By political affiliation, Republicans remained the most optimistic, while confidence fell for Independents and improved slightly for Democrats.

Consumers’ write-in responses on factors affecting the economy continued to skew towards pessimism in April. Comments about prices, oil and gas, and war increased in frequency compared to March—a likely signal of consumers’ underlying worries about how the war in the Middle East will impact their pockets.

A two-week ceasefire and a rebound in stock market indices within the survey-sample period (April 1–22) likely helped ease concerns about financial indicators somewhat in April after spiking in March. Still, consumers remained warry. Consumers’ average and median 12-month inflation expectations ticked downward but continued to be elevated. The percentage of consumers saying interest rates over the next 12 months will be higher on net rose to nearly 50 percent. Expectations for higher stock prices a year from now ticked up.

April marked the 15th consecutive month that expectations remained below the threshold of 80, a level which typically signals a recession is ahead, according to The Conference Board.

Expectations about the labor market and household income six months from now were up slightly, while views on business conditions were slightly more negative.

The percentage of respondents who said a U.S. recession over the next 12 months is “very likely” rose again, as did the number of those who believe the U.S. is already in one. Notably, these measures are not included in calculating the Consumer Confidence Index.

Charts courtesy The Conference Board