US Consumer Confidence Index Has Declined to 104.0 in April
Posted on 24. Apr, 2007 by admin in Forex News
Consumer confidence in the U.S. declined to the lowest level in eight months in April, sapped by concerns about rising gasoline prices and a wave of mortgage defaults.
The New York-based Conference Board’s index of consumer confidence fell to 104.0 this month from 108.2 in March. The index averaged 105.9 last year.
This year’s 23 percent increase in gasoline prices is taking a bite out of Americans’ wallets, and the lingering housing slump threatens to erode their wealth. The Federal Reserve, which forecasts “moderate” economic growth, is counting on an expanding job market to keep consumers spending.
Economists expected the confidence index to fall to 105 in April from an originally reported 107.2 in March, according to the median of 67 forecasts in a Bloomberg News survey. Estimates ranged from 102 to 107.5.
The Conference Board’s measure of present conditions fell to 131.3 from 138.5. The gauge of expectations for the next six months fell to 85.8 from 87.9.
The share of consumers who said jobs are plentiful fell to 27.8 percent in April from 30.3 percent in March. The proportion who said jobs are hard to get increased to 20.4 percent from 18.9 percent.
The proportion of people who expect their incomes to rise over the next six months declined to 17.0 percent from 18.0 percent. The share expecting more jobs in six months rose to 12.9 percent from 12.7 percent.
Home Purchases
The share of Americans who plan to buy a home in the next six months fell to 2.7 percent, the lowest since November 2004, from 3.2 percent, the survey showed.
A preliminary survey by Reuters/University of Michigan showed a gauge of sentiment this month fell to 85.3, an eight- month low, from 88.4 at the end of March.
Consumer spending may expand at a 2.4 percent pace in the first and second quarters, compared with a 4.2 percent rate in the last three months of 2006, Spending gains have averaged 3.3 percent since 1990.
Rising gasoline prices are taking a toll on sentiment. The average price of a gallon of regular gasoline at the pump rose to $2.86 as of April 18, the highest since August.
Furnishings
Home foreclosure filings last month jumped 47 percent to more than 149,000 compared with a year earlier as owners struggled with declining property values and higher adjustable interest rates.Mortgage Defaults.
Defaults among so-called subprime borrowers, those with poor or limited credit records, are probably behind the increase, economists said. Still, the limited size of this market suggests it’s not a threat to the entire economy, Federal Reserve policy makers have said.
Strength in the job market is supporting confidence. The unemployment rate unexpectedly fell to 4.4 percent in March, matching a five-year low, and the economy generated 180,000 new jobs, more than economists had forecast.
Consumers were also buoyed by a 4.5 percent gain in the Standard & Poor’s 500 Index through April 20 from the end of March.
