Tuesday, April 26, 2011

Consumer Confidence Rises In April

Last month's consumer-confidence reading tumbled, but some relief came with this month's. March's has been revised upwards to 63.8, and April's came in at 65.4. That number was slightly above expectations for 65.0. As with last month's, this month's reading was dragged down by high gas prices. Interestingly, the index of current conditions was up for the seventh month in a row.
“Consumers’ short-term outlook improved slightly, suggesting that the uncertainty expressed last month is easing,” said Lynn Franco, director of the Conference Board’s consumer research center. “Although confidence remains weak, consumers’ assessment of current conditions gained ground for the seventh straight month, a sign that the economic recovery continues.”...

“The Fed will be pleased to see that the further rise in gasoline prices towards $3.90 a gallon does not appear to have put another dent in US consumer confidence or added to households’ inflation expectations,” wrote Paul Dales, senior U.S. economist with Capital Economics, in a research note.

The picture given is consistent with recovery, albeit a subpar one. Earnings season still shows a nice crop of earnings beats like Ford's and Apple's. Stagflation is approaching, but a double-dip recession isn't.

Gold didn't like this news, just as it wasn't too fond of the Case-Shiller number despite the latter showing housing in the dumps as of February. The metal started slipping at 8:45, and fell below $1,500 at 9:15. The consumer-confidence number provided the final drag-down to a new day's low of $1,491.80. After bottoming at 10:15, the metal did recover but only to $1,500- $1,502. Gold may have shaken off the consumer-confidence surprise, but it's still lower after all was said and done.

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