Consumer comfort in U.S. declines from highest level since 2007

WASHINGTON – Consumer confidence declined last week from the highest level in more than seven years as Americans’ attitudes about their finances ebbed with the stock market.

While the Bloomberg weekly index of consumer comfort fell to 45.5 in the period ended Feb. 1 from 47.3, it was still the second-best reading since July 2007. Measures of the buying climate and views of the economy also lost ground, the figures showed Thursday.

Americans with annual incomes of $100,000 or more saw the biggest decrease in sentiment since February 2014, coming off the worst month in a year for the Standard & Poor’s 500 Index. At the same time, job growth and the cheapest gasoline since 2009 are giving households, whose spending accounts for about 70 percent of the economy, more purchasing power.

“Consumer sentiment has been on a pretty dramatic rise over the last several months so a bit of a stumble is to be expected,” said Gary Langer, president of Langer Research Associates LLC in New York, which produces the data for Bloomberg. “We’re at a point where we no longer need to question the durability of the gains we’ve seen. There’s cause for optimism.”

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A gauge of Americans’ views on the current state of the economy dropped to 39.9 last week from 42.3. An index of the buying climate, showing whether this is a good time to purchase goods and services, declined to 37.5 from 39. A measure of personal finances fell to 59.2 from 60.7.

Stock market gyrations were reflected most in the moods of those at the top of the wage scale. The comfort gauge for households earning more than $100,000 declined to 67.3 last week from 72.1. The S&P index lost 3.1 percent in January, the biggest drop since a year earlier, on concerns over slowing growth overseas and that a stronger dollar will erode corporate profits.

Comfort increased last week in just one of the seven income groups in the survey. A gauge of those making $50,000 to $74,900 advanced to 55.2 from 54.4 the prior week.

While the comfort measure deteriorated for full-time workers and home owners, it remained above 50, indicating a greater share are optimistic than pessimistic.

Declines in confidence were seen in all four U.S. regions and throughout every age group.

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