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Economic Report: Americans grow increasingly confident in the economy and expect unemployment to decline

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The numbers: Americans gained even more confidence in late April about the economy and their own financial well-being thanks to rising vaccinations and record federal stimulus that included $1,400 checks.

The consumer sentiment index rose to 88.3 this month from a preliminary 86.5 reading, the University of Michigan said Friday. That’s the highest level since the onset of the pandemic.

Read: The resurgent U.S. economy grew 6.4% in first quarter, GDP shows, and even faster growth lies ahead

What happened: The combination of declining coronavirus cases and massive government aid has eased the angst of Americans.

Read: Consumer spending soars in March after Americans get $1,400 stimulus checks

What’s also helping is a surge in hiring and the prospect of more new jobs becoming available. A record number of respondents said they expect unemployment to fall sharply this year.

The so-called index of current conditions was unchanged at 97.2 compared to the preliminary April reading that covered the first two weeks of the month.

Yet a forward-looking gauge on what consumers expect six months from now showed further improvement in late April. The so-called expectations index rose to 82.7 from an initial 79.7.

That’s the highest level since February 2020, a month before the U.S. epidemic began.

Big picture: The U.S. economy is gaining momentum and outlook for the rest of the year is pretty rosy — assuming coronavirus cases keep falling.

Companies are hiring again. The federal government is pumping huge amounts of money into the economy. And Americans are itching to go out to eat dinner, travel, take a vacation or attend a ball game. The pentup demand will also help keep the economy going strong at least through the end of the year.

What they are saying? “Overall, the data indicate an exceptional outlook for consumer spending through mid-2022,” said Richard Curtin, chief economist of the survey. 

Market reaction: The Dow Jones Industrial Average
DJIA,
-0.47%

and S&P 500
SPX,
-0.41%

fell in Friday trades, but both indexes remain near all-time highs.

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