WASHINGTON (AP) -- Americans are more optimistic the job market is healing and will deliver higher pay later this year. That brighter outlook, along with rising home prices, cheaper gasoline and a surging stock market, could offset some of the drag from the recent tax increases and government spending cuts.

A gauge of consumer confidence rose in April, reversing a decline in March, the Conference Board, a private research group, said Tuesday. The board attributed the gain to optimism about hiring and pay increases. Economists also cited higher home values and record stock prices.

Despite the rise in the index, to 68.1 from 61.9 in March, confidence remains well below its historic average of 92. Still, the increase signaled that consumers, whose spending drives about 70 percent of the economy, see better times ahead.

A separate report Tuesday showed that home prices nationwide rose in February by the most in nearly seven years. The Standard & Poor's/Case-Shiller 20-city home price index jumped 9.3 percent in February from a year earlier. Prices in all 20 cities rose on an annual basis for a second straight month.

Phoenix led all cities with a year-over-year price gain of 23 percent. Floyd Scott, owner-broker at Century 21 Arizona Foothills in Phoenix, said demand is particularly strong for homes priced below $300,000.

Because of a tight supply, homes for sale are routinely receiving multiple offers, he said. That's driving prices up.

"Now the job market is starting to improve, so younger adults are moving out and either getting an apartment or a house," he said.

Big changes in government policy have caused sharp swings in consumer sentiment in recent months. Social Security taxes rose 2 percentage points Jan. 1. That lowered incomes for a typical household earning $50,000 by about $1,000 this year.

And the across-the-board government spending cuts that began taking effect March 1 forced many federal agencies to furlough workers, which reduced their incomes.

Yet consumers have shown resilience. Economists note that on top of higher home values, record stock prices have boosted household wealth. On Monday, the Standard & Poor's 500 stock index closed at its highest level ever. Consumers who feel wealthier tend to be more confident and more willing to spend.

And employers have added an average of 188,000 jobs a month in the past six months, up from 130,000 in the previous six.