US consumer confidence slips in April

The Conference Board said Tuesday its consumer confidence index dropped to 94.2 this month after rising to 96.1 in March.

The April report showed confidence on a sideways path, with modest progress in one month followed by a slight retreat in the following month.

Consumers' assessment of current conditions improved in April, which could suggest that the economy is growing at a stable pace. But their expectations for the future fell to a two-year low.

Paul Ashworth, chief U.S. economist at Capital Economics said that the recent rise in gasoline prices seemed to be offsetting the rebound that has occurred in the stock market.

"Consumer confidence has trended lower in recent months, but the fundamentals for consumption remain encouraging," Ashworth said.

He noted that the labor market remains strong, interest rates are low and the price of such key household assets such as homes and stocks were on the rise.

Ashworth said the reading for consumer confidence was consistent with consumer spending growing at around a 2 percent rate, an improvement over the 1.5 percent spending growth he has forecast for the first quarter.

Economists closely watch consumer spending because it accounts for 70 percent of economic activity.

The confidence gauge is based on an index where 100 was the reading in 1985.