We will say one thing for those Americans, they are nothing if not optimistic.

With the US balance of payments deficit making the UK shortfall seem like a walk in the park, and with consumer debts at truly terrifying levels, consumer confidence has just hit a four year high,

The US Consumer Confidence Index, as defined by the Conference Board, has hit 109.6, from 107.5 in March. That’s the highest level since May 2002.

Lyn Franco, director of the Conference Board Consumer Research Center said: “Recent improvements in the labor market have been a major driver behind the rise in confidence in early 2006. She added: “However, expectations for the economy and labor market have been trending downward since peaking in 2003. And while prices at the pump have yet to impact confidence, further increases could dampen consumers’ mood.” Americans might be optimistic, but they like their oil too. Next month the recent hikes in black gold will be reflected in the index. Is this likely to lead to a fall? But as serious a threat to the US economy as the high price of oil is the danger of a fall in house prices. Many fear that a UK style soft landing in house prices would have a catastrophic effect on Uncle Sam’s economy.

Capital Economcis said of the latest Conference board figues:” Existing home sales increased to 6.92m at an annualised pace in March, from 6.90m. The markets were sensibly expecting a fall to 6.66m, based on the reported drop in pending sales. (See Chart.) Existing sales cannot defy gravity forever and are likely to experience the sort of sharp declines already reported for sales of new homes soon. Despite the overall optimism of consumers, they have only been less inclined to buy a house in the next six months on one occasion (November 2004) since the Conference Board started asking that question in 2000.”

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