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Consumer sentiment declines for 2nd straight week
[WASHINGTON] Consumer confidence declined for a second straight week, interrupting a four-month surge as Americans' perceptions of their finances and the economy waned.
The Bloomberg index of consumer comfort retreated to a five-week low of 44.3 in the period ended Feb 8 after dropping to 45.5 the prior week, the first back-to-back decline since September. Even with the recent setback, the gauge of sentiment is hovering close to the highest level since July 2007.
A fluctuating stock market and rebounding gasoline prices since the end of January are probably keeping confidence from advancing further. At the same time, increased employment opportunities and signs of a pickup in wage growth point to sustained gains in consumer spending, which accounts for about 70 per cent of the economy.
"It's a pause from the party," said Gary Langer, president of Langer Research Associates in New York, which produces the data for Bloomberg. "That said, this week's result is better than any of the index's weekly readings from mid- Oct 2007 through the end of 2014." The Bloomberg measure for the state of the national economy fell to a five-week low of 38.1 from 39.9. The index for personal finances declined to 57.4 from 59.2. The gauge for whether it is a good time to make purchases also decreased, to 37.2, the lowest since November, from 37.5.
By region, a gauge of sentiment among Americans in the South fell 4 points, the most since October 2013, to a six-week low of 40.1. Confidence in the Midwest also declined. It increased in the Northeast and West.
Comfort among the lowest income earners fell last week, while those at the upper end of the scale were more upbeat. For those making US$75,000 to US$100,000 a year, the gauge of confidence climbed 5 points to the highest level since July 2007. Sentiment among Americans earning less than US$15,000 was the weakest this year.
Last week's drop in comfort extended to almost every age group. The biggest decline was among 35-to-44 year olds.
An improving job market may be giving part-time employees optimism that they can find full-time jobs. Sentiment among part-time workers increased for the first time in four weeks.