Consumer outlook rises

WASHINGTON -- Consumer confidence jumped to the highest level in five months in April as Americans' expectations about the economy's future, including the job market, improved, according to a report out Tuesday that offered fresh hope that the economy may be hitting a bottom.

Still, confidence remains very low, suggesting there is a long way to go before the economy gets back onto a healthy track.

The closely watched consumer confidence index rose to 39.2 in April from 26.9 in March, the Conference Board said. That marked the second consecutive increase in confidence from the record low hit in February and brought the index to the highest level since November.

While consumers' feelings about the current economy improved a bit, their view of the economy six months out posted a big jump. The so-called expectations index was 49.5 this month, up from 30.2 in March and the highest since September.

"The sharp increase in the expectations index suggests that consumers believe the economy is nearing a bottom," says Lynn Franco, director of The Conference Board Consumer Research Center. "However, this Index still remains well below levels associated with strong economic growth."

Says Steven Wood, chief economist at Insight Economics, "Confidence is deeply mired in recessionary territory although consumers are not as depressed as they were earlier in the year."

The consumer confidence index was 90.6 in December 2007, the month the economy fell into recession.

Consumers' view of the job market six months from now improved. Some 13.9% said they expected there would be more jobs in six months than there are now, up from 7.3% in March and the highest in nearly two years. Still, one-third said they expected there would be fewer jobs in six months while more than half said they expected there would be the same number of jobs.

Economists keep a close eye on consumer confidence because consumer spending accounts for more than two-thirds of U.S. economic activity.

Economists in a USA TODAY survey conducted April 16-22 estimated consumer spending rose at a seasonally adjusted annual rate of 0.9% in the January-March quarter after diving in the second half of 2008. Official government numbers on first quarter consumer spending and overall economic activity will be released Wednesday. The economists predicted gross domestic product, the broadest gauge of U.S. economic activity, contracted at a 5% annual pace in the first quarter after plunging 6.3% in the fourth quarter, according to the median answer of the 51 economists.