WASHINGTON – Confidence among U.S. consumers soared in July to the highest level in almost seven years as Americans grew more upbeat about the labor market and the outlook for the economy.
The Conference Board’s index rose to 90.9, the highest since October 2007, from a revised 86.4 in June, according to the New York-based private research group said Tuesday. The gauge exceeded the most optimistic forecast in a Bloomberg survey in which the median called for an 85.4 reading.
More employment opportunities, fewer firings and resilient equity markets are buoying spirits against a backdrop of geopolitical tension in Ukraine and the Middle East. Faster wage growth would help to further spur sentiment and provide the wherewithal for bigger gains in consumer spending.
“Employment conditions improved, gas prices are lower, equity markets remain robust, and that’s pretty much it,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York. “The fact that confidence is rising at a fairly steady rate implies that employment growth is going to continue at a fairly healthy rate.”
Estimates of the 75 economists in the Bloomberg survey ranged from 82.8 to 88.5 after a previously reported 85.2 reading in June.
Stocks rose, with the Standard & Poor’s 500 Index advancing 0.1 percent to 1,981.64 at 11 a.m. in New York.
Another report released Tuesday showed home prices rose in the 12 months ended in May at the slowest pace in more than a year as a lull in the housing market limited appreciation. The S&P/Case-Shiller index of property prices in 20 U.S. cities increased 9.3 percent from May 2013 after a 10.8 percent gain in the year ended in April. Compared with the prior month, home prices fell for the first time in two years.
The Conference Board’s gauge of present conditions rose to 88.3, the strongest reading since March 2008, from 86.3 in June. The barometer of consumer expectations for the next six months increased to 92.7, the highest since February 2011, from 86.4 a month earlier.