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United States News Title: Americans’ View on Economic Outlook Improves to Four-Month High Americans’ view of the economic outlook improved in September as stock prices rallied to a five- year high. The gap between positive and negative expectations narrowed to minus 8 this month, the highest reading since May, as the percentage saying the U.S. was heading in the wrong direction dropped by the most in three years, according to results of the Bloomberg Consumer Comfort Index. The weekly measure rose to a seven-week high of minus 40.8 in the period ended Sept. 16 from minus 42.2. The gain in share prices may be making households more secure in their finances at a time when gasoline prices are rising, wages are stagnant and unemployment hovers above 8 percent. The Federal Reserve’s commitment to keep buying assets until the job market improves and similar measures by central banks around the globe to stem a slowdown may also be giving consumers reason to believe the worst is over. The gain in confidence is “likely due to a modest wealth effect among middle- and upper-income groups associated with the rally in domestic equity markets and perceptions that Europe financial tensions have eased,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. Another report today showed more Americans than forecast filed applications for unemployment benefits, adding to concern the labor market is slackening. Jobless claims fell by 3,000 to 382,000 in the week ended Sept. 15, Labor Department figures showed. The median forecast of 49 economists surveyed by Bloomberg projected 375,000. The four-week moving average, a less volatile measure, climbed to 377,750, the highest since the end of June. Stocks fell as data from China to Europe increased concern the global economic slowdown is worsening. The Standard & Poor’s 500 Index, which closed last week at the highest level since December 2007, fell 0.5 percent to 1,453.9 at 9:33 a.m. in New York. The share of households viewing the economy as heading in the wrong direction dropped to 34 percent in September, the fewest since June, from 45 percent the prior month, according to the Bloomberg monthly expectations gauge. The 11-point improvement is the biggest since October 2009. Women and Americans living in the Northeast were among the groups that showed the biggest declines in pessimism this month, the report showed. Those saying the economy was on the right track climbed to 26 percent this month from 23 percent in August. All three of the weekly comfort index’s components improved. The index of Americans’ views on the current state of the economy rose to minus 71.3, the highest since mid-June, from minus 72.4. The personal finance barometer rose to minus 5.3 from minus 6.2, and the measure of Americans’ view of the buying climate climbed to minus 45.8 from minus 47.9. “We saw last month consumer confidence ticked up, and I believe that we’re going to see that continue to tick up as the economy continues to stabilize,” David R. Jaffe, president and chief executive officer at Ascena Retail Group Inc., said during a Sept. 6 teleconference. Suffern, New York-based Ascena, whose brands include dressbarn, is specialty retailer of women’s apparel. The Bloomberg Consumer Comfort Index is in line with the Thomson Reuters/University of Michigan preliminary consumer sentiment for September, which unexpectedly rose to a four-month high of 79.2, according to a report last week. Growing confidence may help boost consumer spending after disappointing results last month. Sales at general merchandise, clothing and electronics stores dropped in August, data from the Commerce Department showed last week. Total retail sales increased 0.9 percent, the most in six months, led by demand for automobiles and a surge in receipts at service stations as gasoline prices climbed. Kohl’s Corp. (KSS) of Menomonee Falls, Wisconsin, the third- largest U.S. department-store company, plans to hire more than 52,700 workers to help with year-end holiday sales, an increase of more than 10 percent from last year, according to a company statement this week. Today’s comfort report showed confidence improved more among Democrats than Republicans last week. Democrats’ sentiment gauge rose to minus 27.9, the best since late July and higher than any other group except those with household incomes of $100,000 or more. Democrats have reported higher optimism than Republicans for a record 26 weeks. Among Republicans, the index rose to minus 46.3 from minus 47.9 the prior week. The gauge for Democrats exceeded that for Republicans by 18.4 points, tying the record reached in mid- July. “Partisanship continues to color economic sentiment as the presidential election nears,” said Gary Langer, president of New York-based Langer Research Associations, which compiles the index for Bloomberg. Confidence among political independents, a key swing vote in the November presidential election, was little changed at minus 45.8 last week from minus 45.3. The Bloomberg Consumer Comfort Index, compiled by Langer Research Associates in New York, conducts telephone surveys with a random sample of 1,000 consumers 18 and older. Each week, 250 respondents are asked for their views on the economy, personal finances and buying climate; the percentage of negative responses is subtracted from the share of positive views and divided by three. The most recent reading is based on the average of responses over the previous four weeks. The comfort index can range from 100, indicating every participant in the survey had a positive response to all three components, to minus 100, signaling all views were negative. The margin of error for the headline reading is 3 percentage points.
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