US consumer confidence hits 16-year high

WASHINGTON: US consumer confidence surged to a more than 16-year high in March amid growing labor market optimism while the goods trade deficit narrowed sharply in February, suggesting the economy was regaining momentum after faltering at the start of the year.

The economy’s strengthening fundamentals were underscored by other data on Tuesday showing further gains in house prices in January. Robust consumer confidence and rising household wealth from the home price gains suggest the recent slowdown in consumer spending, which has held back economic growth, is likely temporary.

“With confidence upbeat and several other signals related to consumer spending in fairly good shape, we think that real consumption will firm moving forward,” said Daniel Silver, an economist at JP Morgan in New York.

“It looks likely that the recent spending data were held down by some temporary factors related to unusually mild weather and a delay in tax refund issuance.” The Conference Board said its consumer confidence index jumped 9.5 points to 125.6 this month, the highest reading since December 2000. Consumers’ assessment of both current business and labour market conditions improved sharply in March.