US consumer confidence soared in April, the month that saw President George W. Bush gain victory in Iraq. The last time the consumer confidence data showed such a surge was in 1991, a year before the current president's father, George H. W. Bush, victorious after an earlier war against Iraq, lost the US presidency.

The Conference Board said its index of consumer confidence rocketed nearly 20 points, reaching a preliminary 81.0 in April from a downwardly revised 61.4 in March. The March figure capped a year of corporate scandal, terrorism and war that had dragged the index down more than 40 per cent from 110 in May 2002. Ms Lynn Franco, a board official, said: "The swift outcome in the Middle East has helped quell consumers' short-term concerns... [The results] may very well signal a turnaround in confidence and a more favourable outlook for consumer spending." Stock prices for US retail chains, a key gauge of traders' estimates of US spending prospects, have surged 20 per cent since mid-March.

But some economists warn that any rebound will not last without a sustained recovery in the labour market. The rebound in confidence after the 1991 Gulf war evaporated as the economy languished for months in a "jobless recovery".

Mr Oscar Gonzalez, economist at John Hancock Financial Services, said: "While up is better than down, and more is better than less, increased confidence does not necessarily foretell faster growth. What consumers say they feel is less important than what they do. Unless the labour market improves, or at least stabilises, there may be less doing and confidence may start to slip again." Other economic data remain weak. Recent reports suggest growth in consumer purchasing power slowed to a crawl by the end of the first quarter. Business confidence remains depressed, investment is anaemic and business continues to concentrate on cutting costs. Rapidly rising worker productivity continues to give many firms the ability to do much more with less. Surging worker benefit costs are re-emerging as a drain on profits.

In a separate report the US Labor Department said its employment cost index - which tries to capture salaries, benefits and all other worker compensation - jumped in the first quarter at the fastest pace in a decade, driven by the largest increase in health care, pension and other benefit costs since 1988.

The Conference Board confidence index is based on a survey of roughly 5,000 US households. The latest results were obtained between April 1, before the war ended, and April 22nd, two weeks after Baghdad fell.