July 31 (Bloomberg) -- Confidence among U.S. consumers unexpectedly rose for the first time in five months as Americans became more upbeat about job prospects later this year.
The Conference Board’s index increased to 65.9 this month from 62.7 in June, figures from the New York-based private research group showed today. Economists projected a reading of 61.5, according to the median estimate in a Bloomberg News survey. The report showed a gain in the share of consumers anticipating better labor and economic conditions in six months.
A pickup in the housing market and decreases in fuel prices are helping sustain consumer sentiment. At the same time, faster job gains are needed to spur consumer spending, which grew in the second quarter at the slowest pace in a year.
“Consumers are definitely getting some benefit from lower gasoline prices and that is freeing up some income,” Gus Faucher, a senior economist at PNC Financial Services Group Inc. in Philadelphia, said before the report. “Confidence is OK, it’s not great. We need better job growth.”
Estimates for the Conference Board gauge ranged from 59 to 67 in the Bloomberg News survey of 71 economists. The measure averaged 53.7 during the 18-month recession that ended in June 2009.
The Commerce Department said today consumer purchases in June cooled, indicating a weak handoff to the second half of the year. Personal spending was unchanged after decreasing 0.1 percent. Incomes climbed 0.5 percent following a 0.3 percent gain.
Another report showed housing prices are stabilizing. The S&P/Case-Shiller index of property values decreased 0.7 percent in May from a year earlier, data from the group showed in New York.
Today’s confidence figures contrast other data on consumer sentiment. The Bloomberg Consumer Comfort Index fell in the week ended July 22 to minus 38.5, the lowest level in two months. The Thomson Reuters/University of Michigan final July index of consumer sentiment was the weakest this year.
“Despite this month’s improvement in confidence, the overall index remains at historically low levels,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement. “While consumers expressed greater optimism about short-term business and employment prospects, they have grown more pessimistic about their earnings.”