Consumer Confidence Slips Slightly
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NEW YORK (AP) _ Consumer confidence dipped in April from a seven-month high, but optimism about the economy still remained higher than analysts’ expectations.
The New York-based Conference Board said Tuesday that its Consumer Confidence Index fell to 108.8 this month from a revised 110.7 in March. Analysts were expecting a reading of 107.5.
The industry group’s index, based on a monthly survey of some 5,000 U.S. households, is closely watched because consumer confidence drives consumer spending, which accounts for about two-thirds of the nation’s economic activity.
``This month’s retreat in confidence was caused primarily by a softening in consumers’ assessment of current economic conditions,″ said Lynn Franco, director of the Conference Board’s research center.
Still, despite the dip, ``consumers’ expectations remain virtually undaunted and signal continued expansion in the months ahead,″ she said.
The index compares results to its base year, 1985, when it stood at 100. Before falling in April, consumer confidence was at its highest since August, when the reading stood at 114 prior to the Sept. 11 attacks.
On Monday, the Commerce Department reported consumer spending and incomes rose by 0.4 percent in March, offering hope that consumers would continue bolstering the economic comeback.
On Wall Street, key stock indexes were higher on the news Tuesday. The Dow Jones average rose 81 points to 9,900 and the Nasdaq composite index rose 16 points to 1,673.
To help boost the economy, the Federal Reserve slashed short-term interest rates 11 times last year. Citing signs of a rebound, the Fed opted to leave rates _ now at 40-year low_ unchanged in January and March. Many economists believe the central bank will hold rates steady at its May 7 meeting and possibly into the summer.