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Title: Consumer Sentiment in U.S. Rises to Pre-Recession High
Source:
Bloomberg
URL Source: http://www.bloomberg.com/news/2012- ... ber-to-pre-recession-high.html
Published: Oct 12, 2012
Author: Elizabeth Dexheimer
Post Date: 2012-10-12 10:43:35 by Brian S
Keywords: None
Views: 2619
Comments: 1
Confidence among U.S. consumers unexpectedly jumped in October to the highest level since before the recession began five years ago, raising the odds that retailers will see sales improve. The Thomson Reuters/University of Michigan preliminary October consumer sentiment index increased to 83.1, the highest level since September 2007, from 78.3 the prior month. The gauge was projected to fall to 78, according to the median forecast of 71 economists surveyed by Bloomberg News. Rising stock and property values along with falling joblessness may keep giving Americans a psychological boost, brightening the household-spending outlook during the year-end holidays. Improving confidence may play a role in next month’s election as Republican challenger Mitt Romney tries to make a case for unseating President Barack Obama, a Democrat. “People expect the economy is going to be healthier next year, they expect their job prospects to get better and they even expect their income to be a little better,” Christopher Low, chief economist at FTN Financial in New York, said before the report. “People do seem to be comfortable saving a little less and spending a little more.” Estimates ranged from 75 to 81, according to the Bloomberg survey. The index averaged 64.2 during the last recession and 89 in the five years leading up to the 18-month economic slump that began in December 2007. Stocks extended earlier gains after the report. The Standard & Poor’s 500 Index climbed 0.3 percent to 1,436.56 at 10:19 a.m. in New York. The gain in Michigan’s sentiment reading exceeded the improvement in other measures. The Bloomberg Consumer Comfort Index held last week near a three-month high with more Americans saying it was a good time to make purchases even as they grew more pessimistic about the economy. The Michigan index of consumer expectations six months from now, which more closely projects the direction of consumer spending, climbed to 79.5, the highest since July 2007, from 73.5 in September. The gauge of current conditions improved to 88.6 from 85.7. Rising confidence may determine whether households spend more at restaurants and shopping centers. Consumer spending, adjusting for inflation, barely rose in August. Purchases climbed 0.1 percent following a 0.4 percent gain in July, the Commerce Department said on Sept. 28. Incomes rose 0.1 percent in August, less than spending, causing the saving rate to fall to 3.7 percent from 4.1 percent. “We are very encouraged by the positive signs we see in the general economy,” Randy Potts, chief executive officer of Forest City, Iowa-based Winnebago Industries Inc., the biggest U.S. maker of motor homes, said on an earnings teleconference yesterday. “Past experience has shown that motor-home sales closely correlate to both consumer confidence and new single- family housing starts, both of which are now showing real signs of improvement.” The company announced revenue rose 24.5 percent in the fiscal fourth quarter from the same time last year. Consumers in today’s confidence report said they expect less inflation. They projected prices will rise 3.1 percent over the next 12 months, compared with 3.3 percent in the prior survey. Over the next five years, Americans expected a 2.6 percent rate of inflation, compared with 2.8 percent in the previous report and the lowest since March 2009. Stock prices and higher home values have bolstered household wealth. The S&P 500 Index was up 13.9 percent for the year through yesterday. It reached its highest level since December 2007 in the week ended Sept. 13. The S&P/Case-Shiller index of home values in 20 cities climbed 1.2 percent in July from the same time last year, more than forecast and the biggest 12-month jump since August 2010.
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#1. To: Brian S, A K A STONE (#0)
Take me OFF your ping list, or I will commence shitting on EVERY thread you post.
*Obamanomics On Parade*
"I am relying on my personal experience with Morons, which have been universally positive." -jwpegler
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