Reflecting a significant improvement in consumers’ assessment of current conditions, the Conference Board released a report on Tuesday showing U.S. consumer confidence reached its highest level since February of 2020 in the month of April.
The Conference Board said its consumer confidence index jumped to 121.7 in April after spiking to a revised 109.0 in March.
Economists had expected the consumer confidence index to rise to 112.0 from the 109.7 originally reported for the previous month.
The much bigger than expected increase by the headline index came as the present situation index soared to 139.6 in April from 110.1 in March.
The percentage of consumers claiming business conditions are “good” rose to 23.3 percent from 18.3 percent, while the percentage claiming conditions are “bad” fell to 24.8 percent from 30.1 percent.
Consumers’ assessment of the labor market also improved, with those saying jobs are “plentiful” surging up to 37.9 percent from 26.5 percent. The percentage claiming jobs are “hard to get” also slid to 13.2 percent from 18.5 percent.
Meanwhile, the Conference Board said consumers’ optimism about the short-term outlook held steady, with the expectations index inching up to 109.8 in April from 108.3 in March.
The percentage of consumers expecting business conditions to improve over the next six months crept up to 40.5 percent from 40.3 percent, while the percentage expecting conditions to worsen was relatively unchanged at 11.9 percent.
The outlook for the job market was slightly less upbeat, as consumers expecting more jobs in the months ahead dipped to 34.5 percent from 35.9 percent and those anticipating fewer jobs ticked up to 15.5 percent from 14.4 percent.
“Consumers’ perception of a strengthening labor market bodes well for another robust non-farm payroll gain in April,” said Kathy Bostjancic, Chief US Financial Economist at Oxford Economics.
“However, the jobs-plentiful measure remains below its pre-pandemic level and underscores the labor market is still far from full employment,” she added. “This helps keep the Fed in a very dovish stance.”
On Friday, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of April.
The consumer sentiment index for April is currently expected to be upwardly revised to 87.5 from the preliminary reading of 86.5, which was up from 84.9 in March.
The material has been provided by InstaForex Company – www.instaforex.com