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Outlook on US Consumer Confidence

H.S. Borji
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Outlook on US Consumer Confidence

US consumer confidence has been shaky in recent months, supporting the view household spending may be slow to rebound after an inclement winter weighed on economic activity. The Reuters/University of Michigan Consumer Sentiment Index is scheduled for release Friday. The report could show a moderate increase in consumer confidence, according to a broad consensus of market analysts.

The University of Michigan’s overall index of consumer sentiment dipped from 81.6 to 80 last month. Economists expected sentiment to improve amid signs household spending was on the rise. The April index is expected to rise 1 point to 81.

US retailers posted a sharp rebound in February, data from the Commerce Department showed last month. Retail sales edged up 0.3 percent in February after declining 0.6 percent at the beginning of the year. The rebound suggested the US economy was normalizing after an unusually cold winter.

Economists expect consumer spending to rise this season as warmer weather and improving finances unleash pent-up demand. However, it’ll take more than warm weather to revive consumer sentiment. Income growth was flat last month, despite the steady pace of job creation. Although slightly more confident about personal finances, consumers were weary about the economic outlook last month, claiming bigger payroll gains would be needed to drive personal spending.

The Consumer Sentiment Index is considered a moderate market mover. The US dollar won’t be impacted to any considerable degree should the flash estimate land close to the expected target of 81.

In Thursday’s mid-day session, the US dollar index was down more than 0.1 percent to 79.37. The greenback suffered another setback after the minutes of the Federal Reserve’s March meetings showed officials hadn’t reached a decision about monetary policy.

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