U.S. consumer confidence, buoyed by an improved labor market, this month reached its highest level in four years, a private research firm said this week.
The consumer confidence index, which had increased in March, improved further in April to 109.6, up from 107.5 last month. This is the highest level since May 2002. The rise surprised economists, who projected that rising fuel prices and higher interest rates would rattle consumer confidence.
“Improving present-day conditions continue to boost consumer spirits,” says Lynn Franco, director of The Conference Board, in a statement. “Recent improvements in the labor market have been a major driver behind the rise in confidence in early 2006.”
Consumers shrugged off high fuel prices this month, according to The Conference Board. However, Franco warns that further increases in prices at the pumps could dampen the consumer’s mood.
Consumers’ overall assessments of current conditions remain favorable. Those claiming conditions are “good” rose to 29.7 percent from 27.9 percent. Those claiming conditions are “bad,” however, also rose to 15.1 percent from 14.7 percent. Labor market conditions, which had been mixed, improved. Consumers saying jobs are “plentiful” increased to 29.1 percent from 28.3 percent, while those claiming jobs are “hard to get” edged down to 19.6 percent from 20.4 percent.
Consumers’ outlooks for the next six months improved moderately in April. Those expecting business conditions to worsen decreased to 9.1 percent from 9.8 percent. Those expecting business conditions to improve, however, also decreased to 17.1 percent from 17.8 percent.