U.S. consumer sentiment edged higher in April, helped by a stronger labor market and rising equity prices, a report showed Friday.
The University of Michigan’s preliminary April index of consumer sentiment was at 89.2, up from March’s final reading of 88.9, said sources who saw the subscription-only report.
The median forecast of Wall Street economists polled by Reuters was for a 89.0 reading.
Still, economists said the dip in a forward expectations component of the report raised a warning flag about future economic activity.
“Consumers are conflicted. They feel fine for now, but they are worried about the future,” said Robert Brusca, chief economist at Fact and Opinion Economics in New York.
“This is an economy that is giving contradictory signals. You don’t have companies willing to build inventories, which show that they don’t have a lot of confidence. Retailers are pumping sales by discounts, but you can’t inflate confidence,” Brusca said.
U.S. Treasury debt prices showed little reaction to the report, though benchmark yields had already broken above 5 percent for the first time in nearly four years on worries about tighter monetary policy. The dollar was steady and Wall Street stocks were slightly higher ahead of the long holiday weekend.
The survey’s index of current conditions rose to 111.1 in April from 109.1 in March, while the consumer expectations measure softened to 75.1 from 76.0.
The labor market has shown solid gains in recent months, and figures last week showed the unemployment rate unexpectedly dropped back to a 4-1/2 year low of 4.7 percent. Job gains have helped underpin household incomes and retail spending.
Higher equities prices also helped boost sentiment about current conditions, analysts said, with the stock market supported by merger-and-acquisition activity.
Consumer spending accounts for about two-thirds of all U.S. economic activity, but in recent years confidence measures have been a weak guide to actual spending plans.