Consumer confidence fell sharply in April as inflation worries and a downbeat outlook on the job market pushed optimism to its lowest level since 2022.

The Conference Board's consumer confidence index retreated to 97 in April, below economists' expectations for 104 and lower than March's reading of 103.1.

"Consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income,” said Dana Peterson, chief economist at the Conference Board, in a release.

"According to April’s write-in responses, elevated price levels, especially for food and gas, dominated consumer’s concerns, with politics and global conflicts as distant runners-up."

In addition to the confidence index, consumers' expectations for the next six months also fell to their lowest level since July 2022.

The Conference Board reasoned this was driven by a more pessimistic outlook for "future business conditions, labor market conditions, and income expectations."

On a six-month basis, the Conference Board noted that confidence among consumers earning less than $50,000 per year has been "stable" while confidence in those earning more has "weakened."

"Even as consumer confidence dropped to its second lowest level over the past three years, consumers look to be in a solid place," Wells Fargo senior economist Tim Quinlan wrote in a research note on Tuesday.

"However, a still elevated cost of living in combination with a labor market that is not quite as hot as it was in 2021 and 2022 looks to be leaving them in a sour mood."

The drop in consumer confidence also comes as US economic data has grown increasingly mixed.

Several months of inflation data have come in hotter than expected, as price pressure proves more persistent than some policymakers and economists had expected.

On Friday, new data showed the core Personal Consumption Expenditures (PCE) index, which strips out the cost of food and energy and is closely watched by the Federal Reserve, rose 2.8% over the prior year in March, above estimates for 2.7% and unchanged from the annual increase seen in February.

Through the first three months of the year, core PCE rose at an annualized pace of 4.4%, a "concerning" trend, per Nationwide senior economist Ben Ayers. "The hot inflation readings through March should write off any rate cuts in the first half of 2024," Ayers wrote in a note on Friday.

Fed Chair Jerome Powell has noted that recent inflation data hasn't shown the progress on price increases the central bank had hoped for entering 2024.