US consumer confidence exceeds expectations buoyed by jobs growth

CONFIDENCE among US consumers increased more than forecast in April, signalling that the improving labour market is helping Americans weather rising fuel costs.

The Conference Board’s confidence index rose to 65.4 from a revised 63.8 reading in March, figures from the New York-based private research group showed.

Six straight months of job growth, with joblessness at a two-year low in March, is helping sustain consumer purchases, which account for about 70% of the economy.

At the same time, bigger gains in sentiment may be difficult as households spend more for food and petrol, at their highest levels in almost three years.

“Confidence is picking up on the back of an improving labour market and rising stock prices, which are offsetting higher gasoline costs,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “Consumers will have both the confidence and the income to keep spending.”

Another report yesterday showed residential real estate prices dropped in February by the most in more than a year, a sign the housing market is struggling to stabilise.

The S&P/Case-Shiller index of property values in 20 cities fell 3.3% from February 2010, the biggest year-over-year decrease since November 2009.

Estimates for consumer confidence ranged from 57 to 68 in the Bloomberg survey of 69 economists.

The measure averaged 97 during the expansion that ended in December 2007.

The group’s measure of present conditions increased to 39.6, the highest since November 2008, from 37.5 a month earlier.

The share of consumers who said jobs are currently plentiful rose to 5.2% from 4.6%. Those who said jobs are hard to get decreased to 41.8%, the fewest since January 2009, from 44.4%.

The outlook was less rosy. The percentage of respondents expecting more jobs to become available in the next six months decreased to 17.5 from 19.6 the previous month.

The report contained one positive bit of news for the housing market. The share of Americans planning to buy a house over the next six months increased to 5.5%, matching the record high reached in January 1978. The data goes back to 1964.

Intentions to purchase cars and appliances also improved.