U.S. consumer confidence rose in April to a four-year high as optimism about job prospects overshadowed concerns over rising gasoline prices, a survey showed Tuesday.
The Conference Board said its index of consumer sentiment climbed in April to 109.6, the highest reading since May 2002, from an upwardly revised March reading of 107.5.
Economists polled by Reuters on average had forecast that the index likely fell to 106.0.
"Recent improvements in the labor market have been a major driver behind the rise in confidence in early 2006," said Lynn Franco, director of the Conference Board Consumer Research Center. "However, expectations for the economy and labor market have been trending downward since peaking in 2003. And while prices at the pump have yet to impact confidence, further increases could dampen consumers' mood."
Improving present-day conditions continued to boost consumers' spirits, Franco said.
The business research group's present situation index rose to 136.2 from 133.3 in March, while the expectations component improved to 91.9 from an upwardly revised 90.3 in March.
Sentiment indexes have traditionally been seen as a gauge of U.S. consumer spending, which accounts for roughly two-thirds of overall economic activity.
Consumers grew more optimistic about the job market in April, according to the Conference Board.
"Fewer people are worried about jobs right now, more people think that jobs are easy to get, and I think that's supporting confidence despite the high energy prices," said Gary Thayer, chief economist at A.G. Edwards & Sons.
The percentage of consumers saying jobs were "plentiful" rose to 29.1 percent in April from a revised 28.3 percent in March, while those who said jobs were "hard to get" fell to 19.6 percent in April from a revised 20.4 percent in March.
The labor market has shown healthy gains in recent months, helping buoy consumers' income and sentiment. The unemployment rate dropped to a 4-1/2-year low of 4.7 percent in March as the economy extended 2-1/2 years of unbroken monthly gains in hiring.