Confidence among U.S. consumers increased for a third straight week as Americans grew more optimistic about the economy, finances and the buying climate.
The Bloomberg Consumer Comfort (COMFCOMF) Index advanced to minus 30.9 in the period ended Dec. 8, the best reading since the first week of October, from minus 31.3. The gauge is making progress after sinking to a one-year low in early November in the aftermath if the partial federal shutdown the prior month.
More employment opportunities and stock-market gains are brightening the spirits of consumers as the holiday-shopping season kicks into full gear. The figures showed confidence waned among most lower-income groups, indicating broad-based progress in spending will depend on faster wage growth.
“A slower pace of firings and rising equity prices has bolstered confidence,” said Joseph Brusuelas, a senior economist for Bloomberg LP in New York. Still, “the pace of hiring and real wage growth will have to advance on a sustained basis before confidence improves to the point that the middle-class consumer is ready to support a more robust recovery.”
Other figures today showed retail sales rose more than forecast in November and applications for unemployment benefits jumped last week from an almost three-month low.
A Commerce Department report showed purchases climbed 0.7 percent last month, the most since June, as Americans bought cars and took advantage of holiday discounts. The median forecast of 83 economists surveyed by Bloomberg called for a 0.6 percent advance.
First-time filings for unemployment benefits jumped by 68,000 to a two-month high of 368,000 in the week ended Dec. 7, according to the Labor Department, reflecting volatility that typically occurs around the year-end holidays. The 300,000 applications filed in the prior week, which included Thanksgiving, were the fewest since Sept. 7.
Stocks fluctuated, following the biggest drop in equities in a month, as investors assessed today’s economic data. The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,782.59 at 9:35 a.m. in New York.
The Bloomberg sentiment gauge, which has averaged minus 31.6 so far in 2013, is on track for the best year since 2007.
All three components of the comfort index rose last week, with measures of personal finances and the buying climate reaching the highest levels since the period ended Oct. 6, in the midst of the 16-day government shutdown.
The gauge of household finances improved to 3 from 2.6 the prior period. The index of whether it’s a good time to purchase needed goods and services climbed to minus 35.6 from minus 36.
The reading of Americans’ views of current economic conditions rose to minus 60.1, the highest since the end of September, from minus 60.4 a week earlier. The gain was the third straight and reflects an improving labor market.
Job openings climbed in October to the highest level in more than five years, a report showed earlier this week. The number of positions waiting to be filled rose by 42,000 to 3.93 million, the most since May 2008, the Labor Department said on Dec. 10.
In November, the jobless rate dropped to a five-year low of 7 percent and employers added more than 200,000 workers for a second month, the agency said last week.
Confidence among unemployed Americans climbed last week to the highest level in four months, reflecting the pickup in job opportunities, today’s report showed. The index of those with full-time positions matched the previous week as the strongest since early October.
Sentiment improved for those earning more than $50,000 a year and declined for most groups earning less. The gauge among Americans earning $100,000 or more was the strongest since the week ended Aug. 11.
Kroger Co. (KR), the largest U.S. grocery-store chain, is among companies noting the divergence.
“For some of our customers, the economy has markedly improved,” W. Rodney McMullen, Kroger’s president and chief operating officer, said on a Dec. 5 earnings call. “But for others, there has been no noticeable improvement at all.
“For the customer under stress, we are offering low entry price point on key items and special low prices on seasonal items,” he said.
Retailers from Wal-Mart Stores Inc. to Macy’s Inc. have also been offering discounts for the holiday season to lure those shoppers who are uneasy about the security of their jobs or incomes. Researcher ShopperTrak reiterated at the end of last month a forecast it gave in September that holiday sales will grow 2.4 percent, the least since 2009.
The Bloomberg Consumer Comfort Index, compiled by Langer Research Associates in New York, conducts telephone surveys with a random sample of 1,000 consumers ages 18 and older. Each week, 250 respondents are asked for their views on the U.S. economy, personal finances and buying climate. The margin of error for the headline figure is 3 percentage points.
The percentage of negative responses is subtracted from the share of positive views and divided by three. The most recent reading is based on the average of responses over the previous four weeks.
The comfort index can range from 100, indicating every participant in the survey had a positive response to all three components, to minus 100, signaling all views were negative.
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