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Business Title: Consumer Confidence in U.S. Increases More Than Forecast on Job Optimism Jan. 25 (Bloomberg) -- Confidence among U.S. consumers rose more than forecast in January to the highest level in eight months as Americans became more optimistic about job prospects. The Conference Board’s index of sentiment increased to 60.6 from a revised 53.3 the prior month that was higher than previously estimated, figures from the New York-based private research group showed today. Economists projected the January gauge would rise to 54, according to the median forecast in a Bloomberg News survey. A pickup in optimism, an improving labor market and tax relief may combine to encourage consumers, whose spending accounts for about 70 percent of the economy. Federal Reserve Chairman Ben S. Bernanke said joblessness will still be slow to decline this year, indicating policy makers meeting today and tomorrow will stick to their plan for more stimulus. “Consumers are seeing the true improvement in the labor market,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York. Still, “more progress is going to be needed to get the types of growth rates in both employment and spending that many are expecting to see this year.” The share of Americans who said jobs were plentiful rose to the highest level since May 2009, while those expecting an increase in incomes climbed to an eight-month high. The Conference Board’s measure of present conditions rose to the highest since November 2008. Stocks Lower Stocks trimmed losses after the report and Treasuries rose. The Standard & Poor’s 500 Index declined 0.2 percent to 1,287.98 at 10:39 a.m. in New York. The yield on the benchmark 10-year Treasury note was 3.40 percent, down from 3.41 percent late yesterday. In an effort to boost optimism among the nation’s business leaders, President Barack Obama will use tonight’s State of the Union address to focus on making the U.S. more competitive with economic rivals. Fifty-three percent of investors view Obama favorably, up from 49 percent in November, reversing a yearlong deterioration in perceptions of the U.S. president, according to a quarterly poll of 1,000 Bloomberg customers who are investors, traders or analysts conducted Jan. 20-24. Estimates of the consumer confidence in the Bloomberg survey of 73 economists ranged from 50 to 57.3 after a previously reported 52.5 in December. The index averaged 96.8 during the last economic expansion that ended in December 2007. Michigan Report The gain contrasts with the Thomson Reuters/University of Michigan preliminary consumer sentiment index, which fell this month as Americans worried that higher gasoline prices would hurt their finances. Another report earlier today showed housing prices in November fell the most in a year, indicating housing has yet to join the U.S. economic rebound. The S&P/Case Shiller index of home values in 20 cities dropped 1.6 percent in November from a year earlier, the biggest 12-month decrease since December 2009, and declined 0.5 percent from October. The Conference Board’s index of present conditions increased to 31 from a revised 24.9. The gauge of expectations for the next six months rose to 80.3 from 72.3. The percent of respondents expecting more available in the next six months rose to 16 from 14.2 the previous month. The proportion who expect their incomes to rise over the next six months increased to 11.4, the highest since May, from 9.9 percent. Jobs Plentiful The share of consumers who said jobs are currently plentiful rose to 5.2 percent from 4.2 percent. Those who said jobs are hard to get decreased to 43.4 percent from 46.0 percent. Confidence in all nine U.S. regions, led by a 21.3-point surge in the West South Central area, which includes Texas and Oklahoma. Americans probably stepped up their purchases in the final three months of 2010. Consumer spending grew at a 4 percent annual pace, the fastest since the last quarter of 2006, according to the median estimate of economists surveyed by Bloomberg before the Commerce Department’s first estimate of fourth-quarter growth on Jan. 28. Luxottica Group SpA, the owner of eyewear brands including Ray-Ban and Oakley, said yesterday fourth-quarter revenue climbed 16 percent on stronger sales in the U.S. and emerging markets. Sales at the Milan-based company’s Sunglass Hut stores open more than a year rose almost 13 percent in the quarter, led by an 18 percent increase in the U.S. Luxottica Results “The improving confidence of consumers” in the U.S. “allowed Luxottica to record excellent results,” the company said in a statement. Luxottica expects “to post solid, stable growth and increased profitability” in 2011, Chief Executive Officer Andrea Guerra said in the statement. “The start of the new year already looks encouraging.” At the same time, people are paying more at the pump, which may limit spending on other goods and services. The average price of a gallon of gasoline rose to $3.10 on Jan. 20, the highest since October 2008, according to AAA. Prices on regular- grade gasoline have exceeded $3 a gallon since Dec. 21. While recent reports have pointed to a recovery in the labor market, Bernanke in Senate testimony on Jan. 7 said it may take five years for the labor market to “normalize fully.” Unemployment fell to 9.4 percent in December from 9.8 percent a month earlier as the U.S. added 103,000 jobs, according to Labor Department figures released Jan. 7.
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