Consumer confidence rose in May to the highest level since October 2007 as Americans became more upbeat about the prospects for employment.
The Thomson Reuters/University of Michigan final index of sentiment climbed to 79.3, the ninth straight increase, from 76.4 the prior month. The gauge was projected to hold at the preliminary reading of 77.8, according to the median forecast of economists surveyed.
A record number of households said they’d heard better news on the jobs outlook, which combined with the economy from Europe’s debt crisis. The figures also showed 63 percent of Americans, the most in more than a year, had a favorable view of buying conditions for big-ticket items.
“This is telling us the consumer is feeling OK,” said Robert Brusca, president of Fact & Opinion Economics in New York, who projected a final reading of 78.5 in May. “There seems to be enough real improvement in the job market for confidence to be increasing. When confidence readings increase, you can be pretty sure consumer spending numbers will go up.”
Estimates for the confidence measure ranged from 76 to 79, according to the survey of 60 economists. 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.
Stocks fluctuated as concern about Spain’s finances tempered optimism with the Michigan figures. The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,321.2 at 11:44 a.m. in New York. The yield on the benchmark 10-year Treasury note fell to 1.75 percent from 1.78 percent late yesterday.
Michigan’s reading for May contrasts with the Bloomberg Consumer Comfort Index, which has lost ground after reaching a four-year high a month ago.