US consumers shrugged off higher fuel prices in April and sent a widely watched barometer of consumer confidence to its highest level in almost four years, according to research results released today.
However, the New York-based Conference Board warned that if fuel prices continued to rise, it would cast a pall on consumer spending, which accounts for two-thirds of all US economic activity.
The Conference Board said that its consumer confidence index rose to 109.6, up from a revised 107.5 in March. April's reading was the highest since the index touched 110.3 in May 2002. Analysts had expected a reading of 106.4. Confidence has been on an upswing since November in the aftermath of the Gulf hurricanes, except for a sharp dip in February.
"Improving present-day conditions continue to boost consumers' spirits," said Lynn Franco, director of The Conference Board Consumer Research Center in a statement. "Recent improvement in the labor market have been a major driver behind the rise in confidence in early 2006. Looking ahead, consumers are not as pessimistic as they were last month."
Franco added that expectations for the economy and labor market have been trending downward since peaking in 2003, however. She said that "while prices at the pump have yet to impact confidence, further increases could dampen consumers' mood."
AP