Consumer Sentiment Hits Highest Level Since July 2013
Despite the economy and labor market remaining sluggish at best, consumer sentiment improved to its best level in nine months. According to Thomson Reuters/University of Michigan’s preliminary reading, consumer sentiment jumped to 82.6 in April compared to a final reading of 80.0 in March.
The results were better-than-expected, as consumers feel more confident about their current situations and the future. On average, economists expected the index to reach 81.0 this month. In 2013, consumer sentiment ranged from a low of 73.2 in October to a high of 85.1 in July. If consumer sentiment can manage to keep the positive momentum throughout April, it will be the first gain for the gauge this year.
“Economic news reaching consumers grew more favorable in early April,” survey director Richard Curtin said in a statement. “Net reports on changes in employment were more favorable, and negative mentions about current economic policies eased.”
During the last recession, the index averaged slightly above 64. In the five years before the financial crisis, it averaged almost 90. Consumer sentiment is one of the most popular measures of how Americans rate financial conditions and attitudes about the economy. The University of Michigan’s Consumer Survey Center questions 500 households each month for the index.
Current economic conditions, which measure whether Americans think it is a good time to make large investments, improved more than expected to 97.1 from 95.7 in the prior month. Consumer expectations also increased to 73.3 this month from 70.0 in March.
While the unemployment rate remains high and wages are still stagnant, there has been some recent improvement in the labor market. Earlier this week, the Labor Department reported that initial jobless claims fell to 300,000 in the week ended April 5, the lowest level since May 2007. Claims are now nearly 14 percent lower compared to last year. The four-week moving average declined from 321,000 to 316,250 claims, which is the second lowest reading in the past five years.
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