Index of Consumer Confidence Surges

Americans’ optimism in the economy rebounded in March, sending a widely followed barometer of consumer sentiment to a near four-year high, a private research group said Tuesday.

The Conference Board said that its consumer index shot up 4.5 points to 107.2, the highest level since May 2002, when the reading was 110.3. Analysts had expected a reading of 102.

The latest measure was up from a revised 102.7 in February, which was down 4.1 points from January and broke a three-month rebound from last year’s Gulf Coast hurricanes.

“The improvement in consumers’ assessment of present-day conditions is yet another sign that the economy gained steam in early 2006,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement. “Consumer expectations, while improved, remain subdued and still suggest a cooling in activity in the latter half of this year.”

The component of the consumer confidence index that assesses views of current economic conditions rose to 133.3 from 130.3. Another component, which measures consumers’ outlook over the next six months, improved to 89.9 from 84.2 in February.

The Conference Board index is derived from responses received through March 21 to a survey mailed to 5,000 households. The figures released Tuesday include responses from at least 2,500 households.

The upbeat report on consumer confidence is an encouraging sign for retailers, whose sales of spring fashions have been uneven amid cool temperatures. Economists closely track consumer confidence because consumer spending accounts for two-thirds of all U.S. economic activity.

“It is encouraging that consumers are taking the negative things that are happening recently,” said Gary Thayer, chief economist at A.G. Edward & Sons Inc. “Possibly the employment situation is outweighing other concerns.”

The report from the Conference Board said that consumers’ overall assessment of current conditions remains favorable, but their views on labor market conditions was mixed. Those saying jobs are “plentiful” increased to 28.4% from 27.4%, while those claiming jobs are “hard to get” moved up to 20.7% from 20.2%.

Consumers’ outlook for business conditions and the labor market was also more upbeat..