Consumer confidence improved for a fourth straight week as Americans’ views of the economy reached an almost seven-month high.
The Bloomberg Consumer Comfort Index was minus 28.5 in the period that ended March 2, the strongest reading since the first week of January and up from minus 28.6 the prior week. The margin of error for the headline figure is 3 percentage points.
Brighter views of the economy and personal finances helped make up for increased pessimism about the buying climate as households received higher home-heating bills and paid more to fuel their cars. The stock-market rally and higher property values helped lift moods of the wealthiest Americans, while talk in Washington about raising the minimum wage may have boosted spirits among those at the other end of the pay scale.
“Improvement in household sentiment, linked primarily to stabilization in the pace of firings, and modest growth point to a spring time rebound in overall economic activity once the polar vortex loosens its grip on many areas of the country,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “While a slowdown in spending, hiring and housing beyond simple weather effects remains a concern, the economy is likely not to slide back into stall speed this year.”
Another report today showed fewer Americans than expected filed for jobless benefits last week, an indication companies are retaining staff even as cold weather threatens to slow the economy. Jobless claims decreased by 26,000 to 323,000 in the week ended March 1, the fewest since the end of November, according the Labor Department in Washington.
Stocks rose after the figures, sending the Standard & Poor’s 500 Index to an all-time high. The S&P 500 climbed 0.3 percent to 1,879.25 at 9:36 a.m. in New York.
The Bloomberg index measuring views of current economic conditions advanced to minus 49, the strongest reading since Aug. 11, from minus 51.9 the prior period, today’s report showed.
The measure of consumers’ personal finances improved to a 10-week high of 5.1 from 5, while the index measuring whether it’s a good time to make purchases fell to minus 41.5 from minus 39. The buying-climate gauge had been as high as minus 32 as recently as early January.
Some of the weakness has been due to higher prices at the gas pump. A gallon of regular gasoline cost an average $3.47 yesterday, the most since late September, according to AAA, the biggest U.S. auto group.
Colder weather has also pushed up utility bills for American households. The week ended Feb. 15 was the coldest second week of February since 2011, according to weather-data provider Planalytics Inc. The South Atlantic region of the U.S. experienced the most snowfall since 1983 and New England registered the most snow in 20 years, the Berwyn, Pennsylvania-based firm said. The colder temperatures and winter storms followed the chilliest January in three years.
Today’s report also showed confidence declined in the Northeast and Midwest, an indication winter weather weighed on consumer moods in those regions.
Inclement conditions explain some of the recent slowdown in hiring. A report yesterday from the Institute for Supply Management showed a measure of employment in services industries fell in February to the lowest level since March 2010.
Data yesterday from the ADP Research Institute in Roseland, New Jersey, also showed companies hired fewer workers than projected, a sign employers were waiting for a boost in demand before increasing headcounts.
Greater progress in the labor market that leads to faster wage growth would help provide a spark for companies such as Ford Motor Co. While the second-biggest U.S. automaker reported a decline in February vehicle sales from a year earlier, the company remains optimistic.
“Consumer confidence had been steady with modest job and income gains expected to continue and the housing sector fundamentals are aligned for further gains this year,” said Emily Kolinski Morris, the Dearborn, Michigan-based company’s senior U.S. economist.
With higher stock and property values, today’s figures showed an index of confidence among the wealthiest Americans, those making more than $100,000, increased last week to 20.5, the highest since August, from 12.6 a week before.
Sentiment for those making less than $15,000 also rose, reaching a 10-week high, which may reflect discussions in the nation’s capital about raising the minimum hourly wage. Democrats led by President Barack Obama are pushing for an increase of the federal minimum to $10.10 from its current $7.25.
Confidence among part-time workers advanced to the highest level in almost a year.
The Bloomberg Consumer Comfort Index 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 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.