[WASHINGTON] Consumer confidence increased last week to the highest level since mid-2007 as steady declines in gasoline prices and more hiring boosted Americans' attitudes about the economy.
The Bloomberg Consumer Comfort Index rose to 45.4 in the period ended Jan 11, the highest reading since July 2007, from 43.6 the week before. A measure of households' views of the economy was also the strongest in more than seven years.
The improvement comes on the heels of steady job gains, while the cheapest prices at the gas pump since 2009 provide relief to cash-strapped households. A pickup in wage growth would help fuel additional gains in sentiment and boost consumer spending as the US attempts to power through a slowdown plaguing markets abroad.
"Views of the national economy have advanced the most dramatically," Gary Langer, president of Langer Research Associates LLC in New York, which produces the data for Bloomberg, said in a statement.
"The advance in consumer sentiment mirrors other positive economic developments, including strong GDP growth and an expanding job market."
The measure of Americans' views on the current state of the economy climbed to 39.1 last week, the highest level since August 2007, from 36.2 the prior period. The barometer of personal finances, the strongest of the overall index's three components, rose 1.9 points to 57.4, its biggest jump since early November.
A gauge of the buying climate, which shows whether now is a good time to purchase goods and services, rose to 39.9, the strongest reading since April 2007, from 39.2.
Four of seven income brackets experienced confidence boosts last week, paced by those making US$50,000 to US$75,000, whose sentiment gauge climbed to 51.5 from 45.9. Confidence also rose for those making less than US$50,000 as a group.
Others gaining in confidence included Americans with less than a high school education, Republicans and the unemployed.
Among other data on Thursday, more Americans filed applications for unemployment benefits last week, indicating companies dismissed seasonal workers after the holidays. Jobless claims climbed by 19,000 to 316,000 in the period ended Jan 10, the most since early September, the Labour Department said.
Another report from the agency showed price pressures remain weak. The wholesale price index fell 0.3 per cent in December, the biggest decrease in three years, after dropping 0.2 per cent the prior month.
Also on Thursday, manufacturing in New York expanded more than projected in January. The Federal Reserve Bank of New York's Empire State Index climbed to 10 from a revised minus 1.2 in December. Readings greater than zero signal growth.