Consumer sentiment climbs to highest level since middle of 2007
By
WASHINGTON (MarketWatch) - A gauge of consumer sentiment rose this month to the highest level since mid-2007, as gas prices and the unemployment rate dropped.
The preliminary November reading on the University of Michigan/Thomson Reuters consumer-sentiment index increased to 89.4 - the highest level since July 2007 -from a final October reading of 86.9.
Economists polled by MarketWatch had expected a November reading of 88. That puts the index above the 86.9 in the year leading up to the recession.
Readings on confidence can provide clues to economists about the direction of consumer spending, the backbone of the economy. Earlier Friday, the government reported that retail sales rose last month, a welcome sign as the holiday shopping season nears.
There are a number of factors working in favor of consumer sentiment and spending. For one, gasoline prices have been dropping for months, with the price for a gallon of regular recently hitting below $3, down almost 27 cents from four weeks earlier, according to the U.S. Department of Energy. Fatter wallets from gas savings could pump up real consumer spending throughout the second half of 2014, economists say.
Two, a strengthening jobs market is a plus for consumer spending. Workers are becoming increasingly willing to quit their jobs - signaling their confidence in the economy and their personal-financial prospects. Meanwhile, there are also encouraging signs for wages.
According to the report, a gauge of consumers' views on current conditions rose to 103 in November from 98.3 in October. Meanwhile, a barometer of their expectations increased to 80.6 from 79.6.
Post a Comment for "Consumer sentiment climbs to highest level since middle of 2007"