Consumer confidence has climbed to a four-month high as an improving job market and holiday discounts put Americans in the mood to shop.
The Bloomberg Consumer Comfort Index rose to minus 27.4 in the period ended Dec. 22, the fifth consecutive gain, from minus 29.4. The report on sentiment also showed a gauge of whether it’s a good time to make purchases advanced to the second-highest level since 2007, signaling a pickup in the spending that accounts for almost 70 percent of the economy. Americans stayed upbeat about economic prospects amid more job opportunities, higher home values and record stock prices.
“Consumers are feeling a bit more buoyant heading into the new year,” said Omair Sharif, an economist at RBS Securities Inc. in Stamford, Conn,. “This isn’t surprising, given better labor-market data and low inflation. Consumer spending is going to be pretty robust in the fourth quarter.”
All three components of the weekly Bloomberg comfort index — finances, views of the economy and the buying climate — improved last week, the report showed.
“Consumer sentiment has made a round trip back to pregovernment shutdown highs, largely due to modestly improved economic data, including job growth and stable gasoline prices,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York.
Consumers are less pessimistic about the outlook for the economy after lawmakers struck a deal this month that will ease the next round of spending cuts known as sequestration. The bill marked the first bipartisan budget produced by a divided Congress in 27 years.
The buying-climate index jumped to minus 31.8, the highest since the week ended May 5, from minus 35.5. The gauge assessing Americans’ views on the current state of the economy rose to minus 56.8 from minus 56.9 the prior week. The measure of consumers’ views on their personal finances advanced to 6.4, the highest since early August, from 4.2.
In a sign the job market is making progress, confidence among the unemployed improved to its highest level since January 2008, the report showed.