Consumer confidence in the U.S. held near a four-year high last week as Americans grew less pessimistic about the economy.
The Bloomberg Consumer Comfort Index was little changed at minus 32.1 in the period ended Dec. 23 from minus 31.9 in the prior week, a drop that was within the margin of error of 3 percentage points. The gauge was less than a point from an April reading that was the highest since March 2008.
Higher property values and record-low borrowing costs are supporting a real-estate recovery that’s bolstering household confidence while cheaper gasoline offers some relief to pocketbooks. At the same time, looming tax increases and government budget cuts threaten to keep sentiment and spending from accelerating.
“Households are increasingly confident about their own personal finances, which is likely to sustain the improvement in consumer sentiment in 2013, albeit at low levels,” said Joseph Brusuelas, senior economist at Bloomberg LP in New York. “This is part and parcel of the historically slow expansion the U.S. is currently experiencing.”
Figures from the Labor Department today showed fewer Americans than forecast filed claims for unemployment insurance last week as state offices rushed to tally the data in a holiday-shortened period. Jobless claims dropped by 12,000 to 350,000 in the week ended Dec. 22.
Stocks were little changed as lawmakers return to Washington to resume budget talks. The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,419.4 at 9:36 a.m. in New York.
Americans’ views of the state of the economy climbed to minus 58.5, the second-highest level since March 2008, from minus 59.8 the prior week. The personal finances gauge rose to minus 0.5 from minus 0.8.
The buying climate index decreased to minus 37.5 compared with minus 35.1 in the previous period.
The overall index was 15.4 points better than it was during the same period last year. The gauge has averaged minus 38.3 in 2012 and is on track for its best annual showing since 2007.
Democrats showed their highest confidence reading for a comparable week since 2006. Independents registered their strongest sentiment since April, and highest level for a similar period since 2007. Confidence among Republicans slid last week to the lowest among the three political groups, and was last higher for a comparable week in 2010 when the party scored its biggest victory in the U.S. House of Representatives since 1938.
Today’s figures showed confidence among those 45 to 54 years old advanced last week to its highest level since the week ended April 29. Sentiment among Americans with annual income of $100,000 or more remained positive for an eighth consecutive week, the longest such stretch since the 13 weeks ended June 17.