By Mark Pender
NEW YORK (MNI) – An increasingly positive outlook for the jobs
market points to steady improvement and a long-awaited breakout for the
consumer confidence index, Conference Board survey chief Lynn Franco
said Tuesday.
“The index has been hovering around 50 for a long time and hasn’t
been able to sustain gains, but now we’re beginning to see the labor
market add jobs and as long as that continues, we should be able to
trend higher,” Franco told Market News International.
The Conference Board believes the gain in the index, up more than 5
points for the second straight month and now at 57.9, is consistent with
their outlook for an April non-farm payroll increase of 150,000.
Franco believes job security is the sole central factor for
consumer confidence. Importantly, she notes optimism on the outlook for
general business conditions is improving, an improvement that should
trigger hiring. This expectation of improvement she said is helping to
ease pessimism over the outlooks for jobs and income.
Factors that appear to be outside of the consumer’s view of their
job security are not immediately significant, she said, referring to
sovereign-debt troubles that are deepening quickly in Europe.
Franco believes consumers use the stock market more as a gauge on
the jobs market than as a gauge of investment income. Optimism on the
stock market is building with incrementally more seeing gains, at 35.0%,
and incrementally fewer seeing losses, at 26.5%.
“The stock market can be a very big factor, as it was in 2008.
Right now, it’s helping to alleviate concerns consumers have about their
jobs.”
She points to an 8-tenths dip in buying plans for housing as a
significant signal that second-round stimulus has pulled sales from
future months. Among other details, she sees inflation expectations,
down 1 tenth in the month to 5.3 percent, rising as the driving season
begins and as gasoline prices accelerate further.
** Market News International New York Newsroom 212-669-6430 **
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