US: Consumer Confidence rises to second highest of the cycle - Wells Fargo

Analysts at Wells Fargo, point out that the gain in the Consumer Confidence surprised consensus which anticipated a decline. They noted an improvement in April for both the present situation and expectations. 

Key Quotes: 

“The Conference Board’s measure of consumer confidence rose to 128.7 in April from 127.0 in March. April’s reading is the second highest of the cycle after February’s print of 130.0. The move in April was unexpected as consensus had anticipated another decline on continued uncertainty surrounding trade policy. Consumers appear to have already shaken that concern, which did weigh on confidence in March. April was a stronger month for consumers’ assessment of the present situation and expectations.”

“The index measuring consumers’ assessment of the present situation rose to 159.6 in April from 158.1 in March. April’s present situation index is also at its second-highest level of the cycle, having reached its height in February.”

“Consumers’ expectations index improved to 108.1 in April from 106.2 in March. There was an increase in the share of consumers expecting better business conditions in six months and a decrease in the share expecting conditions to worsen. That movement contrasts March, when uncertainty stemming from trade rhetoric and volatility in the stock market likely dampened expectations for some consumers.”

“The takeaway from the April print is that consumers appear to have already moved on from the increase in uncertainty we saw in March. Their high level of confidence bodes well for a rebound in consumer spending in coming months. The prospect of rising interest rates is not lost on consumers, as the share expecting higher rates next year rose to 72.2 percent in April.”