LONDON U.S. consumer sentiment rose sharply in the first quarter as optimism about the economic outlook improved, according to a global survey which also showed rising confidence in debt-laden euro zone countries.
Globally, consumer confidence returned to pre-financial crisis levels in the first three months of this year, at its highest since the first quarter of 2007, the survey by global information and insights company Nielsen showed on Wednesday.
Improving job prospects are bolstering consumer sentiment. Nearly half of survey respondents globally, or 49 percent, expected the job market would be good or excellent in the upcoming year and positive perceptions about local job prospects over the next 12 months increased in the first quarter in every region except Latin America.
Consumer confidence was highest in the Asia Pacific and Indonesia was the most upbeat market globally for a fifth straight quarter, followed by India.
Croatia and Italy were the most pessimistic markets.
The Nielsen Global Consumer Confidence Index rose 2 points in the first quarter to 96, according to the survey, conducted between February 17 and March 7. A reading below 100, however, signals still relatively low consumer morale.
Consumer confidence in the United States hit the 100 mark, rising 6 points from the previous quarter, and 44 percent of respondents said they were putting spare cash into savings accounts, up from 39 percent in the previous quarter.
"Recovery gained forward momentum in the U.S. as the world's largest economy reported improving unemployment numbers and rising equity and home prices," said Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen. "While the number of Americans who felt mired in recession is still high (63 percent), the sharp improvement from the fourth quarter is an encouraging sign."
Confidence among American consumers should continue to increase although that will depend on further improvement in the labor and housing markets and on sound economic policy, he said.
"Unexpected spikes in interest rates, gasoline prices or impact from major geopolitical events are potential risks. At this point of time, such risks appear to be fairly contained, so one can anticipate slow yet meaningful improvements in consumer confidence in coming quarters," Venkatesh said.
While confidence in debt-laden euro zone economies remained weak it improved sharply in some markets, jumping eight points in both France and Greece from the fourth quarter of last year and rising 7 points in Portugal.
That supports recent data indicating that euro zone countries that were hardest hit by the debt crisis are slowly picking up.
Consumer sentiment fell sharply in Ukraine in the first three months of this year amid a political crisis and tensions with Russia, which annexed the Crimea region last month.
Ukraine saw the biggest drop in consumer sentiment of the 60 markets covered in the survey. Its score fell by 7 points to 56. Egypt saw the biggest jump in confidence, by 11 points to 87.
The Nielsen survey covered more than 30,000 online consumers across 60 markets.
Nielsen Global Consumer Confidence Index in the first quarter, 2014 (change from Q4 survey in brackets):
Top 10 index readings Bottom 10 index readings
Indonesia 124 (0) Romania, Finland 67 (+5,0)
India 121 (+6) Spain 61 (+3)
Philippines 116 (+2) France 59 (+8)
UAE 114 (+4) Ukraine 56 (-7)
Hong Kong/China 111 (+6,0) Hungary 54 (+3)
Thailand 108 (-1) Greece 53 (+8)
Brazil 106 (-4) Serbia 52 (-2)
Switzerland 104 (+10) South Korea, Portugal 51 (+2,+7)
Saudi Arabia 102 (+1) Slovenia 48 (+4)
Peru 101 (-1) Croatia, Italy 45 (+1,+1)
Global consumer confidence average 96 (+2)
United States 100 (+6)
Germany 99 (+4)
UK 87 (+3)
Japan 81 (+1)
(Editing by Ruth Pitchford)