Consumer Comfort in U.S. Advances to a Seven-Month High [View all]
By Elizabeth Dexheimer - Nov 15, 2012
Household confidence climbed last week to the highest level in seven months as Americans became less pessimistic about the economy.
The Bloomberg Consumer Comfort Index rose to minus 33.1 in the period ended Nov. 11 from minus 34.4 the previous week. The gauge has stayed above minus 40, the level associated with recessions and their aftermath, for two months. Twenty-two percent of those surveyed, the most since March 2008, had a positive view of the state of world’s largest economy.
More optimism along with faster job growth would improve the odds of a pickup in retail sales at the start of the holiday shopping season. The risk for consumer spending, which accounts for about 70 percent of the economy, is that the prospect of higher taxes tied to the so-called fiscal cliff prompts households to pull back.
“The long-awaited cyclical recovery in consumer sentiment is gathering momentum, which will likely continue along with what appears to be a quicker pace of labor-market improvement,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “One risk going forward is the fiscal cliff, which has not yet resulted in consumers increasing savings.”