Consumer confidence increases more than forecast
(c) 2013, Bloomberg News.
WASHINGTON — U.S. consumer confidence climbed more than projected in December as Americans' views of current economic conditions jumped to the highest level since April 2008.
The Conference Board's index rose to 78.1 from a revised 72 a month earlier that was stronger than initially estimated, the New York-based private research group said Tuesday. The median forecast in a Bloomberg survey called for a gain to 76.
Americans are growing upbeat about the economy as household finances improve on the heels of more hiring, rising property values and stock-market gains. Increased optimism along with greater wealth will help underpin the consumer spending that makes up almost 70 percent of the economy, providing a boost to the expansion.
"The consumer will continue to do some of the heavy lifting for the economy," said Ryan Sweet, a senior economist at Moody's Analytics Inc. in West Chester, Pa. "The job market is better. Stock prices are rising. The odds of another round of political brinksmanship are lower."
Estimates of 59 economists in the Bloomberg survey ranged from 71 to 81.2 after a previously reported November reading of 70.4. The index averaged 53.7 in the recession that ended in June 2009.
Another report Tuesday showed home prices in 20 U.S. cities rose in October from a year ago by the most in more than seven years.
The Conference Board's barometer of present conditions increased to 76.2 from 73.5. Consumers' assessments of current labor-market conditions also improved. The share of respondents who said positions were hard to get dropped to the lowest level since September 2008.
A gauge of consumer expectations for the next six months jumped to a three-month high of 79.4 in December from 71.1 a month earlier.
The proportion of Americans who said jobs would become more plentiful in the next six months rose to a four-month high of 17.1 percent from 13.1 percent in November.
The share of respondents who said they expected better business conditions in the next six months rose to 17.2 percent from 16.7 percent.
"Despite the many challenges throughout 2013, consumers are in better spirits today than when the year began," Lynn Franco, director of economic indicators at the Conference Board, said in a statement.
Other measures indicate a pickup in confidence. The Bloomberg Consumer Comfort Index jumped to a four-month high for the week ended Dec. 22. The Thomson Reuters/University of Michigan final index of consumer sentiment climbed in December to a five-month high.
For the most important selling season of the year, retailers poured on the discounts to draw holiday shoppers.
Retail sales rose 3.5 percent during the holiday season, helped by deep discounts at malls and purchases of children's apparel and jewelry, MasterCard Advisors SpendingPulse said. Sales of holiday-related categories, such as clothing, electronics and luxury goods, rose 2.3 percent from Nov. 1 through Dec. 24 compared with a year earlier, the Purchase, N.Y.-based research firm said Dec. 26. SpendingPulse tracks total U.S. sales at stores and online via all payment forms.
Consumers are also buying more cars. Auto sales advanced to a 16.3 million annualized rate in November, the highest since May 2007, according to data from Ward's Automotive Group.
An improving labor market is helping bring shoppers to stores. Payrolls expanded by 203,000 workers in November after a 200,000 gain in October, and the jobless rate fell to a five- year low of 7 percent, according to Labor Department data. Employment is forecast to increase about 190,000 this month, which would make 2013 the best year for the labor market since 2005.
Cheaper prices at the gas pump are also a source of relief for Americans. The cost of a gallon of regular-grade gasoline averaged $3.26 this month through yesterday, compared with a high this year of $3.79 reached on Feb. 26.
In a sign of growing wealth, Americans' homes are rising in value and their stock portfolios are climbing. The S&P/Case- Shiller national home-price gauge rose 11.2 percent in the third quarter from the same period in 2012, the biggest year-over-year advance since the first three months of 2006.
The S&P 500, which reached an all-time high last week, has advanced 29 percent through Monday.
The improvement in the economy and labor market helps explain why the Federal Reserve on Dec. 18 decided it will trim monthly bond purchases to $75 billion from $85 billion starting in January.
_ With assistance from Chris Middleton in Washington.