Confidence among U.S. consumers climbed in April from the lowest level in more than a year as an improving job market helped Americans to withstand rising fuel costs.
The Thomson Reuters/University of Michigan final index of consumer sentiment rose to 69.8, less than forecast and following March’s 67.5 reading that was the lowest since November 2009. The gauge was projected to rise to 70, according to the median forecast of 52 economists surveyed by Bloomberg News, and compares with a preliminary index of 69.6.
Payrolls growth for six straight months and a declining unemployment rate are allowing households to sustain their spending, which accounts for about 70 percent of the economy. At the same time, mounting grocery bills and the costliest gasoline since August 2008 indicate it will be hard to achieve bigger gains in consumer confidence.
“Job growth is driving spending but higher fuel costs mean there’s less money to spend on other things,” Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida, said before the report. “Gas prices nearing $4 a gallon are not a help at all.”
Estimates for the confidence measure ranged from 68.5 to 72, according to the Bloomberg survey. The index averaged 89 in the five years leading up to the recession that began in December 2007.
Other consumer gauges have been mixed. The Bloomberg Consumer Comfort Index fell to minus 45.1 in the week ended April 24, the first decline in a month. The Conference Board’s confidence index rose to 65.4 in March, more than the median forecast of economists surveyed by Bloomberg.
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