economic indicators

Growing faith in economy keeps confidence at 5-year high

GROWING FAITH IN THE U.S. economy kept consumer confidence at a five-year high last week as Americans had the least pessimistic view of the economy since 2008.
Posted 6/6/13

WASHINGTON - Consumer confidence last week was unchanged near a five-year high as Americans had the least pessimistic views on the economy since 2008.

The Bloomberg Consumer Comfort Index held at minus 29.7 in the period ended June 2. Sentiment about the current state of the economy improved to the best level since January 2008, and opinions on personal finances were at a one-year high.

Rebounds in housing and stocks have helped upper-income Americans recover much of the wealth lost during the recession, while a drop in firings is probably making the average worker feel more secure in their jobs. At the same time, wage gains that have barely kept up with inflation and a jump in interest rates may be starting to suppress buying plans, raising concern about the outlook for spending.

“People are more certain about their own employment and wage prospects,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “The rising equity and home prices are certainly having an interesting effect on upper-income Americans, who seem to have captured a portion of the recovery in overall national wealth.”

Sentiment for households earning between $75,000 and $100,000 annually reached a five-year high, eclipsing confidence among the highest income earners.

Fewer Americans filed applications for unemployment benefits last week, indicating companies are confident demand will be sustained in the face of federal budget cuts and tax increases, other figures showed today.

Fewer claims

Jobless claims decreased by 11,000 to 346,000 in the week ended June 1 from 357,000, the Labor Department reported. The total number of people receiving benefits declined to 2.95 million. It reached a five-year low of 2.92 million two weeks ago.

Stocks rose as investors consider whether the Federal Reserve will begin scaling back stimulus. The Standard & Poor’s 500 Index climbed 0.1 percent to 1,609.98 at 9:54 a.m. in New York.

Two of the comfort index’s components improved last week. The gauge on consumers’ current view about the economy climbed to minus 53 from minus 54.7, while the measure of personal finances rose to 4.6, its best reading since April 2012, from 2.8.

Fewer consumers said the time was right to purchase needed items, as a measure of the buying climate fell to minus 40.8, a two-month low, from minus 37.3 a week earlier. The measure reached a more than five-year high of minus 31.5 four weeks ago.

Mortgage rates

During that time, mortgage rates have skyrocketed amid concern Federal Reserve policy makers will scale back on the amount of bonds they buy each month. The rate on a 30-year fixed home loan shot up to 3.81 percent in the week ended May 30, the highest level in a year, from 3.35 percent in the week ended May 2, according to figures from Freddie Mac. It reached a record- low 3.31 percent in late November.

Other reports on buyer sentiment have followed the comfort index in showing improvement. The Conference Board’s confidence index rose in May to the highest level since February 2008, while the Thomson Reuters/University of Michigan sentiment gauge reached its highest level since July 2007.

A housing market rebound could be brightening moods. The S&P/Case-Shiller index of property values in 20 cities increased 10.9 percent in the year to March, the biggest 12-month gain since April 2006, a report showed last month.

Next Page
PBN Hosted

Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot by December 31st and get a holiday gift from PBN!
  • Best Places to Work
    Enrollment is now open for the 7th annual Best Places to Work program. Winners w ...
  • Manufacturing Awards
    Applications are now being accepted for the 2nd Annual Manufacturing Awards. Dea ...
Purchase Data
Book of 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
    Latest News