Consumer Comfort in U.S. Improves for First Time in Five WeeksLorraine Woellert
Consumer sentiment rose for the first time in five weeks as Americans, particularly women, grew more upbeat about the economy, finances and the buying climate.
The Bloomberg Consumer Comfort Index rose to 35.1 from 33.3 a week earlier. The gauge of whether it’s a good time to spend advanced by the most in more than a year, while views on the economy were the best in five weeks.
Steady improvement in the job market, higher stock prices and rising property values have helped sustain consumer sentiment this year. Limited wage growth remains a risk to confidence and spending at the same time Americans pay higher prices at the gas pump and grocery-store checkout lines.
“The slower pace of firings has boosted overall confidence despite rising gas and food prices,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “Sentiment is hanging in there as Americans grow more confident about their financial conditions.”
Another report today showed the fewest number of Americans in seven years filed applications for unemployment benefits, a sign the labor market is strengthening. The four-week average of jobless claims dropped to 310,250 in the period ended May 31, the lowest since June 2007.
Stocks rose, sending the Standard & Poor’s 500 Index to another record, after the European Central Bank cut its deposit rate and announced additional measures to counter deflation. The S&P 500 increased 0.2 percent to 1,930.71 at 9:34 a.m. in New York.
The Bloomberg gauge measuring the buying climate climbed 2.7 points to 31.7 last week, marking the biggest increase since the seven days ended April 14, 2013.
Americans’ views on their personal finances improved, with the index rising to 50.4 from 49.5. The gauge of the economy rose to 23.1 last week, the highest since April 27, from 21.4. Even with the gain, the measure remains 11.1 points below its average in data going back to 1985.
The comfort index itself is still 10.2 points short of its pre-recession average of 45.3, according to Langer Research Associates LLC in New York, which conducts the survey.
The U.S. economy is showing signs of a rebound after harsher than normal winter weather contributed to a first-quarter slowdown. Service providers, including construction companies and retailers, expanded in May at their fastest pace in nine months, a report yesterday from the Institute for Supply Management showed. Manufacturers, including automakers, are reporting more orders and rising sales, according to the group’s figures earlier this week.
General Motors Co. this week posted its best month of U.S. sales since the 2008 financial collapse, joining other automakers reporting purchases that exceeded analyst estimates. Autos sold in May at a 16.7 million annualized rate, the strongest since February 2007, according to data from Ward’s Automotive Group.
The comfort index last week showed broad gains across demographic groups, led by sentiment among women, which rose to 35.1 last week, its highest since January 2008. It’s the first time since August 2012 that women were more optimistic than men.
Since mid-1990, sentiment among men has been 7.7 points higher on average than for women. This year, that gender gap has averaged 6 points. The comfort index among men rose to 35 from 34.2.
Among Americans earning $100,000 or more, the comfort index was 57.2, up from 57, holding above the 50 mid-point since February 2013. Among those earning $75,000 to $100,000, confidence was at its highest since September.
Sentiment deteriorated among households earning less than $15,000 and for those earning between $50,000 and $75,000.
Although the job market continues to improve, the outlook among unemployed Americans fell for the fifth consecutive week, matching its lowest level since early March.
Employers added 215,000 jobs last month, according to the median forecast in a Bloomberg survey, the fourth consecutive month of 200,000-plus gains. The Labor Department is scheduled to release the employment report tomorrow at 8:30 a.m.
The Bloomberg Consumer Comfort Index reflects responses from telephone surveys with a random sample of 1,000 consumers 18 and older. Each week, 250 respondents are asked for their views on the economy, personal finances and buying climate
Since May, the Bloomberg comfort index 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 also is reflected in the gauge’s components. It doesn’t affect the measures’ relationship to each other or their correlation with other economic indicators.