Confidence among U.S. consumers climbed in April from a 16-month low, indicating job gains and tax savings are helping Americans cope with rising fuel costs.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 69.6, higher than forecast, from March’s 67.5 reading that was the lowest since November 2009. The gauge was projected to rise to 68.8, according to the median forecast of 66 economists surveyed by Bloomberg News.
The economy has added jobs for six straight months and the unemployment rate fell in March to a two-year low, helping buttress consumer spending, which accounts for about 70 percent of the economy. At the same time, households may find it harder to cope with higher gasoline and food costs that are straining paychecks.
“Increases in consumer sentiment even in the face of higher energy prices means we should see a firmer recovery once those prices stop rising,” David Semmens, a U.S. economist at Standard Chartered Bank in New York, said before the report. “It is good for the outlook for consumer spending and for the economy.”
Forecasts in the Bloomberg survey ranged from 62 to 72. The index averaged 89 in the five years leading up to the recession that began in December 2007.
Other reports today showed consumer prices rose in March for a ninth consecutive month on increases in food and fuel costs, while expenses on other goods and services cooled, and manufacturing continued to drive the expansion.
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