American consumer sentiment held last week near the highest level of the year as an improving job market made households more inclined to spend.
The Bloomberg Consumer Comfort Index was little changed at 37.5 in the week ended July 13 compared with 37.6 in the prior period, a report today showed. The buying-climate gauge climbed to its second-highest reading in more than six years, offsetting a decline in views on the economy and finances.
“The stabilization in consumer sentiment near cyclical highs has to do with the slower pace of firing and growing confidence among Americans that they will find jobs,” said Joseph Brusuelas a senior economist at Bloomberg LP in New York.
Buoyed by employment gains, consumers are feeling better about spending, a sign retailers could see sustained gains in sales heading into the back-to-school shopping season. Nonetheless, the report wasn’t without caveats as consumers’ views this month on the outlook for the economy dimmed after reaching a one-year high in June.
The comfort index has been hovering close to the 2014 high of 37.9 reached in April. Last week’s reading was the fourth-strongest since the start of 2008.
Other reports today showed beginning home construction unexpectedly declined in June to a nine-month low as a record plunge in the South swamped gains in the rest of the nation, and the number of Americans filing applications for unemployment benefits unexpectedly dropped last week.
Housing starts fell 9.3 percent to an 893,000 annualized rate from a 985,000 pace in May that was weaker than initially estimated, according to figures from the Commerce Department.
Jobless claims declined by 3,000 to 302,000 in the week ended July 12, the Labor Department said. The number of people continuing to receive jobless benefits fell to a seven-year low, the report also showed.
Stocks fell as the Treasury Department and European Union imposed further sanctions on Russian business over Ukraine. The Standard & Poor’s 500 Index (COMFCOMF) declined 0.2 percent to 1,977.95 at 9:43 a.m. in New York.
The monthly Bloomberg index on consumer expectations of the economy dropped to 46 in July from 48.5 the prior month, which was the highest level since June 2013.
The weekly buying-climate index advanced to 34.7 from 32.4 the prior week. It marked its best reading since late April and the second-strongest since November 2007.
The measure of the state of the economy fell to 26.4 from 27.7 the week before, its highest reading since January 2008. The gauge for personal finances decreased to 51.6 after reaching a nine-week high of 52.8.
The biggest U.S. banks, led by JPMorgan Chase & Co., are benefiting from increasing credit-card use amid a decline in mortgage lending and a trading slump.
Card revenue rose 3.1 percent from a year earlier to $1.55 billion in the second quarter, New York-based JPMorgan said yesterday in a statement.
“Consumers are spending very strongly,” Chief Financial Officer Marianne Lake said on a conference call with analysts. “It’s travel, it’s restaurants, it’s retail -- it’s across the board.”
Retail sales climbed in June as department stores, clothing outlets and Internet merchants led a broad-based gain that will help provide momentum for the economy in the second half of the year, figures from the Commerce Department showed this week.
Today’s report showed the comfort index for part-time employees declined from the prior week’s high, making it the second-best reading since March 2008. Sentiment among full-time workers fell to 42.2 from 42.5 in the prior week.
Americans making from $75,000 to $99,000 were more upbeat, as comfort rose to a 10-month high.
Homeowners’ perceptions matched the highest level since December 2007, while renters reached a six-week low.
Comfort in the West surged 6.3 points, reaching its highest since January 2008, while other regions saw decreases, especially the South, which dropped to a three-month low.
Since May, the Bloomberg Comfort Index, which is compiled by Langer Research Associates in New York, has been presented on a scale of zero to 100 rather than the previous minus 100 to 100, with the midpoint shifting to 50 from zero. The change is also reflected in the gauge’s components. It doesn’t affect the measures’ relationship to each other or their correlation with other economic indicators. Historical data have been revised and analysis of trends, values and other variables also have not been affected.
To contact the reporter on this story: Nina Glinski in Washington at email@example.com