Consumer confidence rises sharply after four consecutive months of decline; beats forecast
Monday, April 28th 2003, 12:00 am
By: News On 6
NEW YORK (AP) _ Consumer confidence improved sharply in April after declining for four consecutive months, helped by a swift outcome in the U.S.-led war in Iraq.
The Consumer Confidence Index rose to 81.0 from a revised 61.4 in March, the New York-based Conference Board said Tuesday. The increase was far better than the reading of 70 that analysts had expected.
``The swift outcome in the Middle East has helped quell consumers' short-term concerns,'' said Lynn Franco, director of The Conference Board's Consumer Research Center.
The results are from a partial sample of at least 2,500 respondents and are subject to revision once the full sample _ typically 3,500 households _ is in.
Economists closely track consumer confidence because consumer spending accounts for two-thirds of U.S. economic activity, and consumer spending has propped up the economy since the country dipped into recession in 2001.
The Conference Board's index is derived from responses received through April 22 _ as the war in Iraq was making successful strides _to a survey mailed April 1 to 5,000 households in a consumer research panel.
While Franco said an increase of this magnitude occurred after the Persian Gulf War in 1991, this postwar surge differs in that both components of the index _ the index tracking consumers' expectations and the one tracking the ``present situation'' _ posted gains.
``The increase in the Present Situation Index, especially in labor market conditions, may very well signal a turnaround in confidence and a more favorable outlook for consumer spending,'' Franco said.