We’re nearly halfway through the second quarter, and experts are seeing varying trends about whether consumers are prepared to commit to buying a vehicle at your dealership and financing the purchase through your finance company.

While a pair of surveys that measure consumer confidence each month demonstrated some upbeat feelings, the team at Cox Automotive is taking a more cautious approach, especially after reviewing tax-refund information from the IRS.

First, let’s consider two measures of consumer confidence.

The Conference Board Consumer Confidence Index improved in April after decreasing in March. The index now stands at 129.2, up from 124.2 in March. The Present Situation Index — based on consumers’ assessment of current business and labor market conditions – increased, from 163.0 to 168.3. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – increased from 98.3 last month to 103.0 this month.

“Consumer Confidence partially rebounded in April, following March’s decline, but still remains below levels seen last fall,” said Lynn Franco, senior director of economic indicators at The Conference Board.

“The Present Situation Index, which had decreased sharply, improved in April, as did consumers’ short-term outlook. Overall, consumers expect the economy to continue growing at a solid pace into the summer months. These strong confidence levels should continue to support consumer spending in the near-term,” Franco continued.

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was April 18.

Consumers’ assessment of current conditions improved in April. Those stating business conditions are “good” increased from 34.7 percent to 37.3 percent, while those saying business conditions are “bad” decreased from 12.4% to 11.7% . Consumers’ assessment of the labor market was also more upbeat. Those stating jobs are “plentiful” increased from 42.5% to 46.8%, while those claiming jobs are “hard to get” decreased from 13.8% to 13.3%.

Consumers’ short-term outlook also improved in April. The percentage of consumers expecting business conditions will be better six months from now increased from 17.2% to 19.9%, while those expecting business conditions will worsen declined from 10.0% to 9.1%.

Consumers’ outlook for the labor market was more favorable. The proportion expecting more jobs in the months ahead increased from 16.8% to 17.2%, while those anticipating fewer jobs decreased from 14.3% to 13.2%. Regarding their short-term income prospects, the percentage of consumers expecting an improvement was virtually unchanged at 21.5%, while the proportion expecting a decrease declined, from 7.4% to 7.0%.

Meanwhile, the University of Michigan’s Index of Consumer Sentiment has recorded only small monthly variations for more than two years.

The Sentiment Index has averaged 97.2 during the past 28 months — identical to the April 2019 reading — and has remained between 95.0 and 99.0 for 21 of those months.

Confidence has been maintained at high levels due to low rates of unemployment and inflation as well as renewed income growth, according to economist Richard Curtin, director of the U-M Surveys of Consumers. Although consumers now anticipate a slower pace of economic growth, Curtin said they expect those favorable conditions to persist during the year ahead.

“Positive views of current buying conditions are now dominated by people’s favorable income prospects,” he said. “The highest number of consumers in the past half-century mentioned favorable income prospects when asked to explain their views about making discretionary expenditures.

“Nonetheless, consumers displayed a recognition that favorable economic conditions will not last forever and so remained cautious spenders,” Curtin continued. “To be sure, declines in interest rates have helped to partially offset the falloff in favorable perceptions of prices, especially for home purchases. Overall, the data indicate that inflation-adjusted personal consumption expenditures will grow by 2.5% in 2019.”

The University of Michigan research also showed recently improved finances were cited by 53% of all consumers in April, equal to the average level recorded during the past year, which is the highest average since 1999. Income gains remained widespread and reports of increases in net household wealth rose among middle- and upper-income households.

When asked about their financial prospects for the year ahead, the Michigan survey showed 44% anticipated improvements compared with just 8% who expected worsening finances. This was the best overall reading since 2004. When asked about longer term financial prospects, 60% reported in the April survey that they expected to be better off financially over the next five years.

As upbeat as those surveys might be, Cox Automotive considered data percolating from other sources.

“First-quarter real GDP growth was much better than expected at 3.2%, but it wasn’t a result of consumer spending or business investment,” Cox Automotive said in its newest Data Point report. “A build-up of inventories, temporary improvement in net exports and weak inflation made weak consumer spending look better than it really was.

“Growth in business investment also declined,” Cox Automotive continued. “The confusing numbers make the start of the year look better than it really was, but they also set us up for worse numbers next quarter. We could have the weakest second quarter since 2013, which only managed to produce 0.5% growth.”

Furthermore, the latest update from the IRS arriving on May 3 indicated that the total amount of refunds ($274.3 billion) as well as the average amount per filer ($2,732) are both down 2.6% and 1.6%, respectively, year-over-year.

“The average masks the disparate impact of winners having better refunds and losers getting much less or even owing money this year when they enjoyed a refund last year,” Cox Automotive said.