Consumer confidence rose more than forecast in December to the highest level in five months, easing concern about household spending heading into the holiday- shopping season.
The Thomson Reuters/University of Michigan preliminary December consumer sentiment index rose to 82.5, the strongest since July, from 75.1 in November. Economists forecast an increase to 76, according to the median estimate in a Bloomberg survey.
Gains in employment, property values and stock portfolios are supporting confidence as concerns ease that gridlock in Washington will harm the economy. An improvement in consumer sentiment means households may feel more inclined to loosen their purse strings during the holiday shopping season.
“We have seen consumer confidence generally moving higher for upper-income households, but we also are seeing gains among most households because of the improving labor market,” Dean Maki, chief U.S. economist at Barclays Plc in New York, said in an interview. “That’s the factor that’s pushing confidence up.”
Forecasts of the 54 economists in the survey ranged from 71 to 82. The index averaged 89 in the five years before December 2007, when the last recession began, and 64.2 in the 18-month contraction that ensued.
Today’s figures compare with the Bloomberg Consumer Comfort Index, which rose last week to its highest level since early October. The Bloomberg gauge improved to minus 31.3 in the week ended Dec. 1 from minus 33.7 the period before.
Another report today showed employment improved last month, with payrolls growing by 203,000 following a revised 200,000 advance in October, according to Labor Department figures. The unemployment rate fell to 7 percent, the lowest level in five years.