U.S. consumer confidence in April increased from a five-month low as concerns eased about the availability of jobs, according to a survey of economists in advance of today's Conference Board report. Another report may show an increase in previously owned home sales last month. The Conference Board's sentiment gauge will rise to 88.5 this month, the first increase in three months, compared with 88.3 in March, according to the median forecast of 61 economists surveyed by Bloomberg News. The reading for March was the lowest since October. The report is set for 10 a.m. Washington time.
Businesses added more workers to their payrolls last month than at any time in the last four years and private factory surveys this month suggested hiring is improving. The stronger job market may help lift consumer spending even as record gasoline prices are forcing Americans to spend more to fill up their tanks. ``Given the labor market recovery and a stronger economy confidence will continue to rise,'' said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. The Conference Board's consumer confidence survey is based on a mail survey of 5,000 households. U.S. sales of previously owned homes in March may have risen for a second straight month as buyers took advantage of borrowing costs that were close to a four-decade low. Improved employment prospects also helped. The National Association of Realtors in Washington may report that existing homes sold at a 6.2 million annual rate, up from 6.12 million in February, based on the median estimate in a Bloomberg survey. The pace of house purchases has exceeded 6 million for eight months and reached a record 6.68 million rate in September.
Labor Markets
The economy created 308,000 jobs last month, the most since April 2000, the Labor Department reported earlier this month. Regional gauges of manufacturing this month showed that business expanded at a faster-than-expected pace and companies increased hiring to keep up with orders and sales. ``I'm optimistic that we're going to have a much stronger second half,'' said Lew Frankfort, chief executive of Coach Inc., the largest U.S. seller of luxury leather goods, in an interview Tuesday. ``The economy is strengthening. Consumer confidence is higher.'' New York-based Coach said that profit in the quarter ended March 27 jumped 83 percent as sales surged 42 percent, the biggest increase in the company's more than three years as a publicly traded company.
Higher Gasoline
Rising gasoline prices cloud expectations of stronger household spending. The increase has reduced households' ability to spend on other goods and services by about $30 billion, according to estimates this week from Federal Reserve Governor Ben S. Bernanke. Still, retail sales last month, which include purchases at service stations, rose 1.8 percent, the biggest increase since March 2002. Excluding autos and gas, the increase would also be 1.8 percent, the biggest since October 2001. Companies are benefiting. American Express Co., the fourth- largest U.S. issuer of credit cards, said Thursday that first quarter profits rose 15 percent to a record as companies and consumers spent more. Amazon.com Inc., the world's largest Internet retailer, said yesterday it had net income of $111.1 million in the first quarter compared to a loss in the same period last year as sales jumped 41 percent, the biggest rise in more than three years.
Consumer spending adjusted for inflation probably rose at a 4.2 percent annual rate in the first three months of the year, compared with a 3.2 percent gain in the fourth quarter, according to the median estimate of economists surveyed by Bloomberg News ahead of next week's government report on gross domestic product. Spending rose at an average 3.6 percent annual rate per quarter during in the last two decades. The stronger pace of spending helped the economy expand at a 5 percent annual pace from January through March following a 4.1 percent increase the previous three months, according to the survey median. The Commerce Department's GDP report is due Thursday. ///www.bloomberg.com