Consumer confidence rose last week to the second-highest level since August as Americans grew more upbeat about the economy and buying climate.
The Bloomberg Consumer Comfort Index climbed to minus 27.6 in the period that ended March 9 from minus 28.5 the prior week. The advance was the fifth straight and the reading was second only to the minus 27.4 in the week ended Dec. 22 as the strongest since mid-August.
Consumers surveyed were more optimistic about the economy than at any time in the last seven months, reflecting stocks near record highs and a labor market that’s showing signs of improving. At the same time, discussions about raising the minimum wage are probably helping lift spirits at the bottom of the income scale.
“Better employment prospects and a reduced pace of firings in the economy has bolstered confidence in the broader economy,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “Improved sentiment among lower-income groups is particularly important and will likely support growth later this year.”
Other reports today showed retail sales rose in February for the first time in three months and jobless claims dropped to the lowest level since November. Purchases at retailers climbed 0.3 percent last month after a 0.6 percent slump in January that was bigger than initially reported, the Commerce Department said. Applications for jobless benefits fell by 9,000 to 315,000 last week, according to the Labor Department.
Stocks advanced after the reports, with the Standard & Poor’s 500 Index rising 0.3 percent to 1,874.01 at 9:36 a.m. in New York.
The Bloomberg index measuring views of current economic conditions advanced to minus 48 last week, the highest since early August, from minus 49, today’s report showed.
The gauge measuring whether it’s a good time to buy increased to minus 39.3 from minus 41.5, while the measure of consumers’ personal finances declined to 4.3 from 5.1.
Americans’ views for the economy are getting a boost from a rebound in the labor market. Employment grew by larger-than-projected 175,000 last month after the weakest two-month gain in more than a year, Labor Department figures showed last week. The acceleration shows employers are confident the expansion will pick up after winter storms slowed spending.
Lowe’s Cos. is among companies adding staff as warming temperatures pull more customers into stores.
“Stronger job and income growth should create a more favorable environment for consumer spending,” Robert Niblock, Lowe’s chief executive officer, said on a Feb. 26 earnings call.
Hourly earnings for all workers climbed by 9 cents, or 0.4 percent, on average to $24.31 last month, marking the biggest gain since June, the Labor Department’s figures showed. Average weekly pay increased to $831.40 from $830.75.
Confidence readings for full-time workers, single Americans and renters all advanced to the highest levels since August, today’s report showed.
Sentiment also improved for those making less than $15,000 a year, where the comfort index rose to minus 51.2, the best reading since August, from minus 55.6. The gain may reflect discussions about raising the minimum hourly wage to $10.10 from its current $7.25.
An increase in earnings will help make it easier for Americans to surmount higher prices at the gas pump. A gallon of regular gasoline cost an average $3.50 yesterday, the most since September, according to AAA, the biggest U.S. auto group.
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 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.