Preliminary data released by the University of Michigan on Thursday unexpectedly showed a substantial improvement in US consumer confidence in the month of April.
The report showed that the consumer confidence index soared to 65.7 in April from 59.4 in March. The sharp rise surprised economists, who had expected the index to drop to 59.0.
The consumer confidence index rebounded from its lowest level since August 2011 amid an improvement in consumer expectations, with the expectations index rising to 64.1 in April from 54.3 in Mach.
“Consumers still anticipate the national unemployment rate to decline gradually, acting to improve consumer prospects for the national economy,” said Surveys of Consumers chief economist Richard Curtin.
He added: “Perhaps the most surprising change was that consumers anticipated an annual increase in gasoline prices of just 0.4 cent in April, completely reversing the March increase to 49.6 cents.”
The report also showed that the current economic conditions index rose to 68.1 in April from 67.2 in the previous month.
“However, the April survey offers only tentative evidence of small gains in confidence, which is still too close to recession lows to be reassuring,” Curtin said.
He added: “There are still significant sources of economic uncertainty that could easily reverse April’s gains, including the impact on the domestic economy from Putin’s war and the potential impact of new variants of covid.”
On the inflation front, one-year and five-year inflation expectations were unchanged at 5.4 percent and 3.0 percent, respectively.
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