By Sara Shouhayib
Low interest rates and better job prospects boosted consumer sentiment in April according to a survey by the University of Michigan.
The consumer sentiment index for April rose to 95.9 from 93.0 in March. The final reading was unchanged from the preliminary index that was released in early April.
“Consumer optimism has become increasingly dependent on the persistence of low inflation and low interest rates as well as slowly improving prospects for jobs and incomes,” said Richard Curtin, chief economist of Surveys of Consumers.
Curtin said consumer sentiment in April was the second highest since 2007. The highest since 2007, was 98.1 in January.
A separate measure of consumer mood painted a slightly different picture though. Earlier this week the Conference Board said consumer confidence in April fell to 95.2 from a revised 101.4 in March.
Diane Swonk, chief economist and managing director at Mesirow Financial, put more faith in the University of Michigan consumer sentiment reading.
“That is consistent with other measures of confidence in the economy including the President’s approval ratings and affirms our view that we will see more of a pickup in employment and consumer spending than in the overall economy in the second quarter,” Swonk said.
The current economic conditions value rose to 107.0 at the end of April from 105.0 in March. The index of consumer expectations improved as well to 88.8 at the end of April from 85.3 in March.
The inflation expectations index fell to 2.6 at the end of April from 3.0 in March.
According to a poll by Reuters, the final April reading was just below analysts’ expected reading of 96.0.