The figures follow the Thomson Reuters/University of Michigan final index of consumer sentiment which improved to the highest level in six years as Americans’ views of their finances improved. Bloomberg’s Consumer Comfort Index matched its highest level in more than five years during the week ended July 21.
An improved labor market has helped boost confidence levels that plunged during the biggest recession since the end of World War II. Employment climbed by 202,000 a month on average in the first six months of this year, up from 180,000 in the second half of 2012, Labor Department data show.
Federal Reserve officials in June forecast the jobless rate will fall to 6.5% to 6.8% in the fourth quarter of 2014. Unemployment in June was 7.6%.
Job gains, along with cheaper borrowing costs, are emboldening consumers to consider large purchases such as vehicles and homes. New cars and trucks sold in June at the fastest pace since 2007, according to Ward’s Automotive Group, as American drivers replaced aging vehicles.
A rebound in housing helped move trucks off dealer lots as sales of new homes rose last month to the highest level in five years, indicating stronger residential construction is spreading throughout the economy.
Improving consumer confidence is “a big factor in bringing buyers back into the housing market,” Daniel Fulton, chief executive officer of Weyerhaeuser Co., said in a July 26 conference call.
The U.S. real-estate investment trust that manages 20.6 million acres of timberlands in North America is poised to grow revenue by 16% this year, analysts estimate. The lumber supplier expects both pricing and domestic log activity to pick up.
Market volatility and rising rates pose a risk to confidence. A rise in interest rates prompted Fed Chairmen Ben S. Bernanke and other policymakers to emphasize the central bank’s continued accommodative stance.
In June, Fed officials forecast the U.S. will grow 2.3% to 2.6% this year and 3% to 3.5% in 2014.