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Consumer pessimism fades slightly, though rising fuel costs pose a threat

NEW YORK — Consumer confidence rose for a fourth consecutive week as Americans became less pessimistic about the state of economy and their personal finances.

The Bloomberg Consumer Comfort Index climbed to minus 42.6 in the period ending April 17, the best reading since the end of February, from minus 43 the prior week. But one of the index's components, which measures expectations, fell to the lowest level since September, a sign that rising fuel costs are causing families to think the economy will take a turn for the worse in coming months.

The comfort index can range from 100, indicating every participant in the survey had a positive response to all three components, to minus 100, signaling all views were negative.

"Consumer sentiment is resting on the knife's edge," said Joseph Brusuelas, a senior economist at Bloomberg in New York. "Sentiment is likely to continue to move based on labor market conditions, fuel costs and equity prices."

Also Thursday, the U.S. Labor Department said the number of people applying for unemployment benefits dropped 13,000 to a seasonally adjusted 403,000 in the week ending April 16. The decline comes after applications rose 31,000 a week earlier.

Applications near 375,000 are consistent with sustainable job growth. Applications peaked during the recession at 659,000.

The four-week average, a less volatile measure, rose for the second straight week to 399,000. That's about 10,000 higher than it was a month ago.

Meanwhile, a private research group said Thursday that U.S. economic growth should strengthen by summer, but cautioned that consumer concerns over rising gas and food prices could drag on the expansion.

The Conference Board said its index of leading economic indicators rose 0.4 percent in March. The index, which is a measure of future economic activity, has increased for nine straight months.

Growing demand for U.S. manufactured goods and a rebound in requests for building permits helped drive last month's gains. Six of the index's 10 components rose.

Still, the trade group said many people are increasingly worried about inflation. Consumers are spending more, but the rise in costs for basic necessities could force them to spend less on discretionary goods. That could slow economic growth. Gasoline prices have jumped 5.6 percent in the past last month and have risen nearly 28 percent in the past year, the government reported last week.

Information from Bloomberg News and the Associated Press was used in this report.

Consumer pessimism fades slightly, though rising fuel costs pose a threat 04/21/11 [Last modified: Thursday, April 21, 2011 10:36pm]
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