Confidence Index Beats Expectations

Consumer confidence rose more than expected in April with help from the brightening job picture, the Conference Board reported Tuesday.

The consumer confidence index rose to 92.9, up from a revised 88.5 in March, the New York-based group said. That was better than the 88.5 that analysts had expected.

Lynn Franco, director of the Conference Board’s Consumer Research Center, said the improvement was sparked by a more favorable assessment of current business and labor market conditions and increased consumer optimism about the next six months.

“The job market, which has a major impact on confidence, appears to be gaining strength,” she said. “The percentage of consumers claiming jobs are hard to get is now at its lowest level since November 2002, and more consumers expect this trend to continue.”

However, “we need to see continued job growth in order to expect continued increases in consumer confidence,” she cautioned. If that doesn’t happen, consumer confidence will hover at current levels, she said.

Economists closely follow consumer confidence because consumer spending accounts for two-thirds of all economic activity in the United States.

Along with the consumer confidence report Tuesday came better-than-expected data on home sales. The National Assn. of Realtors reported that sales of existing homes were at a seasonally adjusted annual rate of 6.48 million last month, a 5.7% increase from February. March’s sales pace was second only to the all-time monthly high rate of 6.68 million recorded in September 2003. Economists had been expecting sales to rise to a rate of about 6.2 million.