Consumer Comfort in U.S. Improves to Highest Level This Year
By Jeanna Smialek - Feb 28, 2013 9:45 AM ET
Confidence among U.S. consumers improved last week to the highest level this year as the housing recovery and recent gains in stocks removed some of the sting from higher payroll taxes.
The Bloomberg Consumer Comfort Index climbed for a fourth straight week, reaching minus 32.8 in the period ended Feb. 24 from minus 33.4 in the prior period. The share of Americans with a positive view of the world’s largest economy matched the highest since March 2008.
Rising residential real-estate values, combined with stock prices close to five-year highs, are speeding a rebound in household wealth that will help underpin spending. Nonetheless, the highest gasoline prices in four months and disagreement among lawmakers on how to close the federal budget deficit may check the recent gains in sentiment.
“Thus far, most Americans appear to be blissfully unaware, much like they were regarding the tax hikes at the beginning of the year, of the risk due to a greater fiscal drag on growth,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “Rising gasoline prices and policy tensions are likely to weigh on sentiment going forward over the next several weeks.”
Another report today showed fewer Americans than forecast filed applications for unemployment benefits last week, indicating companies were looking beyond looming government spending cuts and maintaining staffing.
Jobless claims decreased by 22,000 to 344,000 in the holiday-shortened week that ended Feb. 23, the Labor Department reported today in Washington. The median forecast of 44 economists surveyed by Bloomberg called for 360,000 applications. The number of people collecting unemployment insurance dropped to the lowest level since June 2008.
more@Bloomberg.com
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