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Consumer confidence holds steady

Consumer confidence in the United States held fairly steady over the past month despite surging energy prices and more cautious hiring by America's employers.
/ Source: The Associated Press

Consumer confidence in the United States held fairly steady over the past month despite surging energy prices and more cautious hiring by America's employers.

The AP-Ipsos consumer confidence index clocked in at 84.5 in April, compared with a reading of 84.2 in March, according to figures released Friday. A year ago, the index stood at 84.8.

April's reading suggests that consumers still feel pretty good about the economy in general even against the backdrop of high prices for oil, gasoline and other energy products, a slowdown in the growth of the nation's payrolls and rising interest rates.

The AP-Ipsos confidence index is benchmarked to a 100 reading on January 2002, when Ipsos started the gauge.

Consumer confidence is closely watched by economists for possible signs about people's buying habits. Consumer spending accounts for roughly two-thirds of all economic activity in the United States.

The economy probably grew at an annual rate of about 4 percent or slightly higher in the January-to-March quarter, according to some economists' projections. The government will release its first estimate of economic growth for the first quarter of this year on April 28. Economic growth is expected to slow in the current April-to-June quarter, but will still be healthy, they said.

Still, economists will be looking for signs in the coming months as to how much consumers might be tightening their belts in response to high energy prices.

Oil prices closed at a new, all-time high last week of $57.27 a barrel. They briefly surged past $58.28 a barrel on Monday, then retreated somewhat.

At the pump, gasoline prices, now averaging $2.22 a gallon (3.8 liters), would peak at about $2.35 a gallon this summer, according to an estimate by the Energy Information Administration.

Federal Reserve Chairman Alan Greenspan this week said tight energy supplies and strong demand, have created "the current price frenzy."

Greenspan, however, said he was hopeful the high prices would spur conservation by businesses and consumers, and greater energy exploration. That would help get prices under control.

The confidence survey, was conducted Monday through Wednesday _ following some other important economic developments.

Last Friday, the government reported that America's employers, hit by high energy bills, added just 110,000 jobs in March, the fewest in eight months. It was less than half of the 243,000 new jobs generated in February. The report, which disappointed economists, underscored the bumpy recovery taking place in the labor market.

The week before _ on March 22 _ the Federal Reserve boosted short-term interest rates for the seventh time since last June in an effort to keep inflation in check. It signaled that there probably would be more increases in the months ahead.

April's overall consumer confidence index reading was based on results of a survey of adults about their attitudes on personal finances and the economy. Results of that survey had a margin of error of plus or minus 3 percentage points.