NEW YORK: US consumer confidence rebounded in March, while home prices rose in January for the eighth straight month according to a closely watched housing index, bolstering hopes for a sustainable economic recovery.
The data on Tuesday (March 30) came a day after news of further gains in consumer spending as Americans feel more confident about the economy. Consumer participation is critical for the durability of the recovery that started in the second half of 2009.
The confidence data also showed a slight increase in optimism about the labour market, although concerns remain. It comes ahead of a key government nonfarm payrolls report due on Friday (April 2) that is expected to show the economy added jobs in March.
The consumer report will "add credence to the economic recovery school of thought", said Jim Awad, managing director at Zephyr Management in New York.
"It's logical that with the economy improving and stocks going up consumer confidence would improve," he said. "The real question is what happens next year after the stimulus is removed, but in the short-term this is good news."
The Conference Board, an industry group, said on Tuesday its index of consumer attitudes rose to a reading of 52.5 in March from an upwardly revised 46.4 in February. Analysts polled by Reuters had expected a March reading of 50.0.
Consumers assessment of the labour market improved. The "jobs hard to get" index declined to 45.8% from 47.3%, while the "jobs plentiful" index increased to 4.4% from 4%.
"The confidence number should boost expectations for Friday's jobs number because historically the labour differential, which is the difference between jobs plentiful and jobs hard to get, has a strong correlation with the unemployment rate," said Kathy Lien, director of currency research at GFT in New York. -- Reuters
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