Consumer Confidence Increases in April
Consumers’ confidence in the U.S. economy this month jumped the most in 12 years as the fighting in Iraq ended, energy costs fell and stock prices rose.
The New York-based Conference Board’s consumer confidence index increased to 81 from a reading of 61.4 in March. The rise was the biggest since March 1991, at the end of the 1991 Persian Gulf War.
A sustained rise in consumer confidence is needed to help boost spending and generate momentum for an economy that’s grown at an annual rate of less than 2% in each of the last two quarters, economists said.
The component of the confidence index that tracks consumers’ expectations for the next six months rose to 84.8 from 61.4, also the biggest gain since March 1991.
A gauge of optimism about the present situation rose to 75.3 this month from 61.4 in March, the biggest gain in more than a year.
Consumers’ assessment of the current job market edged up this month from a nine-year low. The percentage of consumers who saw jobs as plentiful rose to 13% compared with 11.4% in each of the previous two months. The percentage that expected their incomes to rise in the next six months rose to 17.1% from 15.8%.
The share of consumers planning to buy a home increased to 3.3% from 3.2%. The percentage planning to buy a major appliance rose to 28.5%, the highest since November, from 28.2%. The percentage expecting to buy a car fell to 5.9% from 6.6%.
A separate report from the Labor Department showed first-quarter labor costs rose the most in 14 years as employers paid more for benefits.
The employment cost index increased 1.3%, almost double the 0.7% fourth-quarter rise. Benefit costs surged 2.2%, reflecting higher expenses for health insurance and retirement benefits.