Rebounds in housing and stocks have helped upper-income Americans recover much of the wealth lost during the recession. The S&P/Case-Shiller index of property values in 20 cities increased 10.9% in the year to March, the biggest 12- month gain since April 2006, a report showed last month.
Hooker Furniture Corp. is among companies benefiting from the strength in housing and a more confident consumer. The Martinsville, Virginia-based maker of residential furniture is also adding to staff to meet demand.
“We are still hiring,” Michael Delgatti, president of Hooker Furniture’s upholstery division, said on a June 5 conference call. “Our order rate continues to outpace our manufacturing ramp-up even though we have increased capacity.”
Two of the Bloomberg comfort index’s components improved last week. The gauge of consumers’ current views about the economy climbed to minus 53 from minus 54.7, while the measure of personal finances rose to 4.6, its best reading since April 2012, from 2.8.
“People are more certain about their own employment and wage prospects,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “Rising equity and home prices are certainly having an interesting effect on upper-income Americans, who seem to have captured a portion of the recovery in overall national wealth.”
Sentiment for households earning between $75,000 and $100,000 annually reached a five-year high, eclipsing confidence among the highest-income earners, the Bloomberg consumer comfort survey showed. The gains are helping sustain spending.
Household purchases climbed at a 3.4% annualized rate in the first quarter, almost twice as fast as the prior quarter’s 1.8% gain. That helped the economy strengthen, with gross domestic product rising at a 2.4% pace compared with a 0.4% advance in the last three months of 2012, a Commerce Department report showed last week.