NEW YORK -- The US economy showed signs of resilience, despite rising prices at the gas pump, adding fuel to speculation that the Federal Reserve would continue raising interest rates.
A widely watched barometer of consumer confidence rose in April to its highest level in almost four years, according to information from a private research group released yesterday. And sales of previously owned homes edged up slightly in March after rising in February, too.
Analysts said that if fuel prices continue to rise and the economy remains buoyant, the Fed may have reason to keep tightening credit to choke off inflation. The combination of higher interest rates and more expensive fuel could slow consumer spending, which accounts for two-thirds of all US economic activity.
The Conference Board said that its consumer confidence index rose to 109.6, up from a revised 107.5 in March. April's reading was the highest since the index touched 110.3 in May 2002. Analysts had expected a reading of 106.4.
Confidence has been on an upswing since November in the aftermath of the Gulf hurricanes, except for a sharp dip in February when short-lived pessimism over the labor market soured consumer sentiment.
Job growth has been solid, but Americans are paying more for gasoline, which has risen to around $3 a gallon and is expected to increase more during the heavy summer driving season.
The Conference Board derived its index from responses received through April 18, which was before gasoline prices surged to new highs.
Patrick Fearon, senior economist at A.G. Edwards, noted that consumers' ability to spend ultimately depends on how the labor market fares.
''The labor market still looks good, and that gives us some cushion to handle a softening housing market and rising gasoline prices," Fearon said.