Consumer sentiment in U.S. increases to a 3-month high
CONSUMER CONFIDENCE rose to a three-month high in the U.S. in February.
BLOOMBERG FILE PHOTO/DANIEL ACKER
By Jeanna Smialek Bloomberg News
WASHINGTON – Consumer confidence in the U.S. rose in February to a three-month high, which may help to preserve recent gains in household spending.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment climbed to 76.3 this month from 73.8 in January. The gauge was projected to rise to 74.8, according to the median forecast in a Bloomberg survey.
Increased property values, a strengthening job market and stocks at five-year highs are providing a boost to Americans’ balance sheets. A pickup in wealth would help make up for recent gains in gasoline prices and the hit to take-home pay from a two percentage-point increase in the payroll tax.
“We saw a meaningful improvement in overall financial market conditions and home prices, and those are the kind of drivers now for consumer confidence,” said Millan Mulraine, director U.S. rates research at TD Securities USA LLC in New York, who projected a sentiment index of 76. “As attitudes continue to improve, we are likely to see that possibly be reflected in improved spending.”
Stocks were little changed after the figures, with the Standard & Poor’s 500 Index falling less than 0.1 percent to 1,521.13 at 10:41 a.m. in New York.
Other data today showed manufacturing is on the mend. The Federal Reserve Bank of New York said its general economic index climbed to 10 in February, the highest since May, from minus 7.8 in the prior month. Readings greater than zero signal expansion in New York, northern New Jersey and southern Connecticut.
The report showed factories regained their footing after taking a breather in January. Industrial production at factories, mines and utilities fell 0.1 percent in January after a 0.4 percent increase, the Fed said today. Manufacturing, which makes up 75 percent of total production, dropped 0.4 percent last month after the biggest two-month advance since 1984.
Estimates of the 65 economists surveyed by Bloomberg ranged from 70 to 78. The index averaged 64.2 during the last recession, and 89 in the five years before the 18-month economic slump that ended in June 2009.
The report is in line with Bloomberg’s weekly Consumer Comfort Index, which climbed to minus 35.9 in the period ended Feb. 10 from minus 36.3 the prior week.
The Michigan survey’s index of current conditions, which assesses how Americans perceive their financial situation and whether they think it is a good time to buy expensive items like cars, rose to 88 from a six-month low of 85 in January.
The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, advanced to 68.7 from 66.6 last month.