Confidence among U.S. consumers rose last week to the highest level since early October as tensions in Washington calmed and hiring improved.
The Bloomberg Consumer Comfort Index increased to minus 33.7 in the period ended Nov. 24, the strongest in seven weeks, from minus 34.6. Households became less pessimistic about the state of their finances and the economy as the government’s partial shutdown last month receded from memories. The reading was the best for any pre-Thanksgiving week since 2007.
Rising equity and home prices are bolstering household wealth and contributing to a pickup in attitudes just before the holiday-shopping season. The pace of wage and job growth will also influence whether consumers boost their spending, which accounts for almost 70 percent of the U.S. economy.
“Confidence among upper-income households has definitely been bolstered by the appreciation in equity markets,” said Joseph Brusuelas, a senior economist for Bloomberg LP in New York. “The risk to sentiment going forward” may be the recent rebound in gasoline prices that would shake the wherewithal of poorer Americans especially, said Brusuelas.
Other figures today showed fewer Americans than expected filed jobless claims last week and orders for big-ticket items declined in October.
Applications for unemployment benefits decreased by 10,000 to 316,000 in the week ended Nov. 23, the fewest in two months, the Labor Department said in Washington. The median forecast in a Bloomberg survey called for an increase to 330,000 claims.
Bookings for goods meant to last at least three years fell 2 percent last month after a 4.1 percent gain in September, Commerce Department data showed. Excluding transportation equipment, where demand is often volatile month to month, orders dropped 0.1 percent after a 0.2 percent gain.
Stocks rose, with equities heading for a third straight monthly gain, as investors weighed the drop in jobless claims to assess the strength of the economy. The Standard & Poor’s 500 Index increased 0.1 percent to 1,804.78 at 9:32 a.m. in New York.