NEW YORK – Consumer sentiment worsened unexpectedly in early April as persistent job worries weighed on Americans' view of the economy, a survey released Friday showed.
The University of Michigan's (search) preliminary reading of consumer confidence edged lower to 93.2 in early April from 95.8 in March, said market sources who saw the subscriber-only report. Economists had looked for a rise in the index to 96.5.
Americans were also preoccupied with the escalation of violence in Iraq, as U.S. troops have come under a growing number of attacks in several occupied cities.
"We might be seeing some nervousness about the geopolitical situation," said Lea Tyler, U.S. economist at Oxford Economics USA (search). "And even with the big employment number, people are still concerned about job prospects."
The labor market appeared to strengthen remarkably in March, with 308,000 new jobs created, but that failed to comfort Americans.
The survey's current conditions index fell to 104.1 in April from 106.8 in March, while the consumer expectations component eased to 86.2 from 88.8 last month.
Higher gasoline prices also curbed Americans' optimism, particularly among low-income earners, as money spent at the pump cut into other expenses, analysts said.
Economists track consumer confidence as a guide to future spending patterns, although that correlation has not held up very well in recent years.
Despite complaining to surveys that the state of the economy is not to their liking, Americans have kept on spending ferociously. In March, retail sales jumped unexpectedly, prompting some analysts to revise their forecasts for economic growth.