Consumer Confidence in U.S. Climbs to Highest Level in Two Months [View all]
By Caroline Fairchild
Consumer confidence in the U.S. climbed last week to the highest level in two months as optimism over personal finances helped alleviate growing apprehension about the economy.
The Bloomberg Consumer Comfort Index rose to minus 36.1 in the week ended June 24 from minus 37.9 in the previous period. The gauge of household finances was positive for the first time since April, while sentiment toward the state of the economy dropped to the lowest level since February.
A 57-cent decrease in gasoline prices since early April is providing some relief, helping offset concern the job market is weakening by allowing employed Americans to stretch their paychecks. At the same time, sentiment among higher-income households turned negative for the first time in three months as Europe’s debt crisis hurts stock prices.
“The decline in confidence among households earning more than $100,000 per year likely reflects concerns about portfolio exposure to the crisis in Europe and the global economic slowdown,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. Since the top 40 percent of income earners accounts for about 60 percent of consumer purchases, “even a modest pullback can have outsized effects on household spending and overall growth,” he said.