NEW YORK – Americans’ confidence in the economy was resilient in April despite rising job cuts and falling home values.
The Conference Board, a private research group, said on Tuesday that its Consumer Confidence Index is at 69.2, down slightly from a revised 69.5 in March. Economists were expecting a reading of 70, according to a FactSet poll of analysts. The current level is below February’s 71.6, which is the highest level it has been in about a year.
“I am much relieved,” said Mark Vitner, an economist at Wells Fargo Securities. “I thought we would see a large drop. It shows that consumers are tuning out the bad news.”
Economists are paying close attention to consumers’ behavior because the U.S. economy is at a critical juncture. New reports that show rising layoffs and slowing home sales are raising concerns that the economic recovery is facing a spring slowdown for the third straight year. The stock market rally also has lost steam in recent weeks amid renewed worries about the European financial crisis and the economy at home.
While confidence was pretty steady in April, The Conference Board’s report, which is based on a survey conducted from April 1 through April 12 with about 500 randomly selected people nationwide, underscored how Americans’ views of the job market remains cautious.
Those stating jobs are “hard to get” declined to 37.5 percent from 40.7 percent, while those stating jobs are “plentiful” decreased to 8.4 percent from 9 percent. Americans who are anticipating more jobs in the months ahead declined to 16.9 percent from 17.4 percent.
Such caution comes as the average number of people seeking U.S. unemployment benefits over the past month has risen to a three-month high. According to the April jobs report, employers added 120,000 jobs last month – half the December-February pace and well short of the 210,000 economists were expecting. The unemployment rate fell from 8.3 percent in February to 8.2 percent in March – the lowest since January 2009 – but that was mainly because many Americans stopped looking for work.
Meanwhile, the home market remains weak, according to the latest data released Tuesday. Sales of new homes fell in March by the largest amount in more than a year, according to a report released by the Commerce Department. A widely-watched report on home prices showed a drop in February in most major U.S. cities for a sixth straight month, according to Standard & Poor’s/Case-Shiller home-price index.
Still, there are reasons for optimism. Retail sales have been solid, due in part to unseasonably warm weather. And gas prices are beginning to fall, after a four-month surge pushed gas to nearly $4 per gallon earlier this month. The price of gasoline in the U.S. has dropped by nearly 8 cents per gallon since the first week of April following a decline in oil prices and gasoline consumption. Gasoline, on average, now costs about as much as it did a year ago.