WASHINGTON - Consumer confidence rose in April to the highest level since July, boosted by further improvement in the labor market that will provide some traction for the economy after a weather-related slowdown early this year.
The Thomson Reuters/University of Michigan preliminary index of sentiment climbed to 82.6 this month from a four-month low of 80 in March. The median estimate in a Bloomberg survey of economists called for the measure to increase to 81.
More favorable views of current conditions and the outlook show consumers are taking higher prices at grocery stores and gas stations in stride, indicating gains in household purchases will be sustained. More employment opportunities that spur a pickup in wages would help provide a bigger boost for the consumer spending that makes up the largest part of the economy.
“The confidence that we had going into 2014 got pushed back a couple months, but now we’re going to see it blossom in the spring,” said Jay Morelock, an economist at FTN Financial in New York, who projected a reading of 82.3. “Expectations are high for the second quarter to really rebound from the first quarter.”
Estimates of the 66 economists in the Bloomberg survey ranged from 79 to 89.8. The index averaged 89 in the five years before December 2007, when the last recession began, and 64.2 in the 18-month contraction that followed.
Stocks dropped, with the Standard & Poor’s 500 Index heading for its biggest weekly decline since January, as disappointing results from JPMorgan Chase & Co. fueled concern that corporate earnings will be weak. The S&P 500 fell 0.7 percent to 1,820.01 at 10:20 a.m. Friday in New York.
Another report Friday showed inflation at the producer level climbed more than forecast last month. The Labor Department’s producer-price index increased 0.5 percent in March, the most since June, after a 0.1 percent decrease the prior month. Services costs rose the most in four years and prices of food accelerated.
Friday’s figures are at odds with Bloomberg’s weekly measure of sentiment. The Bloomberg Consumer Comfort Index dropped last week to a two-month low as measures of Americans’ views on the economy, their personal finances and the buying climate all declined.
The Michigan survey’s index of expectations six months from now increased to 73.3, the highest since August, from 70 last month. The gauge of current conditions, which measures respondents’ views of their finances, climbed to a four-month high of 97.1 in April from 95.7.
Still, rising gasoline and food prices are straining household budgets. The average price of a gallon of regular gasoline climbed to $3.62 Thursday, the highest since early August, according to AAA, the nation’s largest motoring organization. In 2013, fuel costs averaged $3.49 a gallon. A report released this week, however, found that gas prices in Rhode Island were 17 cents lower in the first quarter than they were in the same 2013 period.