Consumer comfort climbs to eight-month high



of Bloomberg News

WASHINGTON — Consumer sentiment last week reached an eight-month high, reflecting broad-based gains that indicated even wealthy Americans were less concerned about tax increases and fiscal policy challenges heading into 2013.

The Bloomberg Consumer Comfort Index rose to minus 31.8 in the period ended Dec. 30, its highest since April, from minus 32.1 a week earlier. For the year, the index climbed 12.9 points, the biggest annual improvement since 1998. Americans earning $100,000 or more reported their most optimistic reading in more than two years.

“The rebuilding of wealth and modest income gains permitted consumer sentiment to overcome slow growth and a politically divisive environment in late 2012,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. Rising home values and low interest rates in particular are buoying wealthier households, helping to overcome the threat of higher taxes in 2013, he said.

The index finished the year at its best level since mid-April, less than half a point from the 2012 high it reached twice that month. It has held above its traditional trouble zone, the minus 40s, for 15 straight weeks, a positive run last recorded in early 2008.

For the year, the index averaged minus 38.1, the most since 2007. It remains below its long-term average of minus 15.8.

Another report today from the ADP Research Institute showed companies added 215,000 workers in December, the most since February, after a 148,000 gain a month earlier that was larger than initially estimated.

The Labor Department reported initial jobless claims last week climbed by 10,000 to 372,000. The closing of some state employment agencies during the holidays prompted the government to estimate some figures.

The comfort survey, conducted in the last week of the year, showed a more positive outlook among Democrats than other voters.

The index coincides with improvements in other areas of the economy, including housing. Residential real estate, which triggered the economic downturn that ended in June 2009, is rebounding, with resales at their strongest pace in more than two years and building permits at a four-year high.

Two of the three components of the Bloomberg consumer comfort index improved last week. The measure of Americans’ views of the state of the economy climbed to minus 57.1, the second-highest level since March 2008, from minus 58.5 the prior week.

Retailers lured reluctant shoppers with late-December specials after Hurricane Sandy, the presidential election and the school shooting in Newtown, Connecticut, tempered earlier holiday spending.

Twenty retailers reported sales in December rose an average of 4.5 percent compared with last year’s December totals, according to the International Council of Shopping Centers.

December retail sales figures reported by The Associated Press.


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