Consumer confidence, home prices increase

NEW YORK - Americans' confidence in the economy rose in April to its highest level since September 2008, just when the financial crisis escalated, a private research group reported Tuesday.

The upbeat reading, combined with bullish earnings reports this week from companies such as Whirlpool Corp. and UPS Inc., offers more hope the economic rebound is gathering steam.

Also Tuesday, another report showed that a key home price index had its first annual increase in more than three years, though it's too early to say the housing market is recovering.

The Conference Board, a private research group based in New York, said its Consumer Confidence index increased to 57.9 this month from a revised 52.3 in March. The April reading is the highest since September 2008's 61.4. That was when the financial crisis intensified with the collapse of Lehman Bros. Holdings, sending confidence into freefall the following month. Economists surveyed by Thomson Reuters were expecting an index reading of 53.5.

The index - which measures how shoppers feel about business conditions, the job market and the next six months - had been recovering fitfully since hitting an all-time low of 25.3 in February 2009.

In the three Middle Atlantic states - Pennsylvania, New Jersey and New York - the regional consumer confidence index rose to 63.5 from 52.9 in March, the Conference Board said.

Economists watch the confidence number closely because consumer spending including health care and other major items, accounts for about 70 percent of U.S. economic activity.

April's reading is still far from what's considered healthy. A reading above 90 indicates the economy is on solid footing; above 100 signals strong growth. Still, the monthly survey of consumers showed that consumers' current and short-term concerns about jobs and the overall economy are easing.

One component of the overall index, which assesses how consumers feel now about the economy, rose to 28.6 in April from 25.2 in March. The other component, which measures shoppers' outlook during the next six months, climbed to 77.4 from 70.4.

Tuesday's other report, the Standard & Poor's/Case-Shiller home price index, showed that home prices in February posted a 0.6 percent increase on a nonseasonally adjusted basis from a year ago, but 11 of the 20 cities in the index showed declines.

"We have this divergence in the economy," said Gary Thayer, chief economist at Wells Fargo Advisors.