Last Update: 30-Apr-13 10:10 ET
- The Conference Board’s Consumer Confidence Index increased from 59.7 in March to 68.1 in April. That move recovered the entire loss that occurred in March. The Briefing.com consensus expected the index to increase to 61.0.
- The sudden surge in confidence was primarily driven by solid increases in the stock market and slightly lower gasoline prices. Minor improvements in employment levels also likely contributed positively to confidence.
- These gains outweighed the negatives from higher taxes and the sequestration that lowered confidence in March.
- Unfortunately, consumer spending does not typically follow trends in confidence. Spending is highly correlated with income growth. Stronger payroll numbers will do a lot more for spending than a jump in confidence.
- Confidence is an important component behind economic activity, but the real driver is income growth. As long as income remains on an upward trend, spending growth will follow. In this respect, labor market trends help dictate more what consumers do than what they say.
|Employment ('plentiful' less 'hard to get')
|1 yr inflation expectations