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Consumer comfort in US rises as stock prices reach records
[WASHINGTON] Consumer confidence in the US rebounded last week from its lowest level of the year as stocks reached record highs, bolstering Americans' wealth.
The Bloomberg Consumer Comfort Index rose to 43.5 in the period ended March 1 from a reading of 42.7 the prior week that was the lowest this year. Measures of the current state of the economy, personal finances and the buying climate advanced.
The moods of wealthier consumers, who tend to own stocks, rose to a five-week high as the Standard & Poor's 500 index and the Dow Jones Industrial Average advanced to their highs, the report showed. The best labor market since 1999 and cheaper gasoline also are delivering a boost to household spending, which accounts for about 70 percent of the economy.
The recovery in confidence was "likely in celebration of the stock market's advances," said Gary Langer, president of Langer Research Associates LLC in New York, which produces the data for Bloomberg. Among those with annual incomes of more than US$100,000, "it's been higher in this group just twice since October 2007."
The gauge of Americans' views on the state of the economy rose to 37.1 last week from 35.7 the previous week. An index of the buying climate, showing whether this is a good time to purchase goods and services, increased to a seven-week high of 39.3, and a measure of personal finances climbed to 54.1 from 53.8.
The S&P 500 rose to fresh records four times in February, and the Dow posted its best month in two years, helping explain why confidence surged among Americans making more than US$100,000 a year. The gauge jumped to 69.2 last week, the highest level since the end of January.
Moods worsened for those at the bottom of the wage scale. The comfort gauge for workers earning less than US$15,000 a year declined to the lowest since mid-December.
Democratic voters saw an improvement in confidence, with the index increasing to 51.9, the second-highest in 14 years. That compares with 41.3 for Republicans and 38.9 among political independents.
The Bloomberg Comfort Index has been presented on a scale of zero to 100 since May, rather than the previous minus 100 to 100, with the midpoint shifting to 50 from zero. The change is also reflected in the gauge's components. It doesn't affect the measures' relationship to each other or their correlation with other economic indicators. Historical data has been revised and analysis of trends, values and other variables also aren't affected.