(CEP News) - Economists expect the Reuters/University of Michigan Consumer Confidence Index to climb slightly higher in April as U.S. consumers react to the recent gains in stock markets. Nevertheless, relentless job losses and higher gas prices will keep any improvement in sentiment subdued.
The index is forecast to climb to 58.5 from 57.3 in March.
"The boost to confidence from the stock market rally will outweigh the continuing downdraft from widespread job losses and rising unemployment," said economists at IHS Global Insight. They expect the index to reach 60.0.
The S&P 500 stock index has climbed 8.5% in the month of April, while the Dow Jones is up 6.9% on the month.
Paul Dales, economist with Capital Economics, pointed out that weekly initial jobless claims have fallen unexpectedly in the last two weeks - another reason for improvement.
"That said, the jobless claims figures are still consistent with payrolls plunging by at least 600,000 a month," he said. In March, the U.S. nonfarm payrolls report revealed 663,000 job losses in the United States.
Economists at Desjardins were reluctant to call any optimism amongst consumers sustainable.
They said there have been incremental gains the index, but it still remains very low, adding that while healthy financial markets could inspire a boost, there are still the effects of higher gas prices and ongoing job losses to consider.
The Reuters/University of Michigan Consumer Confidence Index wil be released at 10:00 a.m. EDT on Friday.
