Consumer confidence in U.S. rose more than forecast in April

Business Conditions

Those expecting business conditions to improve in the next six months rose to 16.9% in April from 15% the prior month.

“Consumer confidence has been challenged several times over the past few months by such events as the fiscal cliff, the payroll tax hike and the sequester,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement. “Thus, while expectations appear to have bounced back, it is too soon to tell if confidence is actually on the mend.”

The share of consumers expecting more jobs to become available in the next six months rose to 14.2% in April from 13% in February.

The number of respondents who said jobs are currently plentiful advanced to 9.8% in April from 9.5%.

Today’s figures are in line with the Bloomberg Consumer Comfort Index. That measure in the week ended April 21 was close to the highest since January 2008. At the same time, the Thomson Reuters/University of Michigan index of consumer sentiment fell in April to a three-month low.

Consumer Spending

Household spending in the first quarter increased at a 3.2% annualized rate, the biggest gain since the fourth quarter of 2010, Commerce Department figures showed April 26. The increase added 2.24 percentage points to economic growth of 2.5% during the three months.

At the same time, a report yesterday showed spending began to cool late in the quarter. Purchases climbed 0.2% in March after a 0.7% surge in the prior month, the Commerce Department said. Economists project outlays in the current quarter will grow at a 1.8% annual rate, according to the median estimate in a Bloomberg survey from April 5 to April 9.

Chipotle Mexican Grill Inc. still sees a lack of consistency from the American consumer.

“It seems like the economy is off to a great start and then every time, about this time every year for the last two years in the spring, we get mixed signals on consumer confidence and job creation and things like that,” Chief Financial Officer John Hartung said in an April 18 conference call.

Hindering households is the 2 percentage-point increase in the tax that funds Social Security, which took effect at the start of the year. Americans earning $50,000 a year are taking home about $80 less a month.

Bloomberg News

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