Consumer comfort in U.S. climbs to highest level in 5 years

Consumer sentiment climbed last week to its highest level in more than five years as Americans became increasingly convinced the time was right to spend. More

To continue reading this article, please do one of the following.



economic indicators

Consumer comfort in U.S. climbs to highest level in 5 years

BLOOMBERG FILE PHOTO/ARIANA LINDQUIST
CONSUMER CONFIDENCE has climbed to its highest level in five years, according to the Bloomberg Consumer Comfort Index.
Posted 7/3/13

WASHINGTON - Consumer sentiment climbed last week to its highest level in more than five years as Americans became increasingly convinced the time was right to spend.

The Bloomberg Consumer Comfort Index rose to minus 27.5 in the period ended June 30, its highest level since January 2008, from minus 28.3 a week earlier. Measures of personal finances and buying climate gained.

Higher home values and improvements in the labor market are helping boost demand for housing and automobiles as consumers gain confidence the expansion will continue. The figures indicated households are looking past a recent jump in borrowing costs as the economy recovers and fuel costs retreat.

“Declining gasoline prices and the boost from modest income gains appear to be offsetting for the current time volatility in equity markets,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “The key to sustained improvement going forward will be an acceleration in hiring and easing of energy prices, which bolster household discretionary spending despite restrained wage growth.”

Other reports today showed companies boosted employment in June, fewer workers filed claims for unemployment benefits last week and the trade gap unexpectedly surged in May.

Payrolls at U.S. companies climbed by 188,000 workers in June, exceeding the median forecast in a Bloomberg survey, following a 134,000 gain the prior month, figures from the Roseland, N.J.-based ADP Research Institute showed. Jobless claims decreased by 5,000 to 343,000 in the week ended June 29, the Labor Department said.

Trade gap

The gap between exports and imports widened to $45 billion in May, the biggest since November, according to figures from Commerce Department. The 12.1 percent increase in the deficit from April was the biggest one-month gain in two years.

The Standard & Poor’s 500 Index fell 0.4 percent to 1,607.97 at 9:40 a.m. in New York, and oil prices climbed, amid mounting political unrest in Egypt.

The Bloomberg index has foreshadowed changes in other measures. The Conference Board’s gauge in June rose to its highest level since January 2008, exceeding all forecasts in a Bloomberg survey, a report showed last week.

Higher-income Americans are seeing the biggest improvement in confidence. The index for households earning from $75,000 to $100,000 jumped to 14.8, its highest since November 2007, from 9.6 the week prior. The outlook improved for households earning more than $100,000 a year, rising to 18.9, the third-highest level since November 2007, from 14.8.

Buying climate

The advance in the consumer index was driven by a more optimistic view on shopping, with the buying climate index rising to minus 34.9 from minus 37.4 a week earlier as more households said the time was right to purchase things.

A gauge on American’s views on personal finances also improved to 4.4 after holding at 3.8 for two weeks. The measure of how Americans view the current state of the economy declined for a second week to minus 51.9 from minus 51.3. A reading three weeks ago of minus 51.2 was the highest since January 2008.

The housing market is probably accounting for some of the improved optimism. The S&P/Case-Shiller index of property values in 20 cities increased 12.1 percent in April from the same month in 2012, the biggest year-over-year gain since March 2006, a report last week showed. Purchases of new homes jumped in May to five-year high, figures from the Commerce Department also showed last week.

The confidence index was minus 21.3 among homeowners, its second-highest since January 2008, from minus 24 a week prior. The outlook among renters declined for the first time in seven weeks to minus 38.2 from minus 36.5, which was the highest since March 2008.

Next Page
Calendar
PBN Hosted
Events

Two Great Programs...One Great Event. PBN's Annual Celebration of Growth and Innovation is now underway. 2014 applications are now available. Deadline August 1st.
  • Healthiest Employers
    Celebrate with the Healthiest Employers in RI on August 14th at the Providence M ...
  • 40 Under Forty
    Thank you to our sponsors and to all those who attended the 10th Anniversary of ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement