Consumer comfort in U.S. held close last week to high for year

Consumer sentiment in the U.S. held last week near the highest level of 2014 as employment opportunities kept Americans upbeat about the economy.

The Bloomberg Consumer Comfort Index eased to 37.2 in the period ended Oct. 26 from 37.7 a week earlier. The measure reached a high this year of 37.9 in April. A gauge of attitudes about the world's largest economy was the second-strongest since January 2008.

An improving labor market and the cheapest gasoline prices since late 2010 are brightening households' spirits as the holiday shopping season approaches. Job growth that's accompanied by a pickup in worker pay would help propel sentiment further and spur spending into next year.

"The Bloomberg Consumer Comfort Index hit the hold button this week, pausing after a three-week boost in ratings of the national economy that brought it to the top of its recent range," Gary Langer, president of Langer Research Associates LLC in New York, which produces the data for Bloomberg, said in a statement. The index "has faced challenges in mounting a sustained break-out."

The U.S. economy expanded more than forecast in the third quarter, capping its strongest six months in more than a decade, Commerce Department figures showed today. Gross domestic product rose at a 3.5 percent annualized rate after a 4.6 percent pace in the second quarter.

Stocks fell on speculation the economy is strong enough for the Federal Reserve to raise interest rates sooner than estimated. The Standard & Poor's 500 Index dropped 0.1 percent to 1,979.49 at 9:35 a.m. in New York.

Buying Climate

Today's report on sentiment showed the buying-climate measure, which asks whether this is a good time to make purchases, fell for a third week, to 31.6 from 32.7, while the gauge of personal finances was little changed at 52.2 from 52.4 the prior period.

The Bloomberg measure about the state of the economy was little changed at 27.9 after 28, which was the highest in almost seven years.

Lower prices at the gas pump are providing Americans with the wherewithal to spend more on other goods and services. The nationwide average for a gallon of regular gasoline was $3.02 on Oct. 28, down 68 cents from the April peak and the lowest since December 2010, according to AAA, the largest U.S. auto group.

Earlier this week, Whirlpool Corp. said purchases of appliances in the U.S. kept improving in the third quarter.

Appliances Demand

"We continue to see improvements in employment and consumer confidence, which bodes well for all aspects of demand in the U.S.," Marc A. Bitzer, co-vice chairman of the Benton Harbor, Michigan-based company, said on an Oct. 28 earnings call.

The drop in the cost of fuel is resonating at the lower end of the income scale. Today's report showed confidence among those earning less than $50,000 a year increased to the second- highest level since August 2013.

Meantime, swings in the stock-market are probably having a bigger effect on upper-income earners. Sentiment of those making more than $100,000 a year dropped to a six-week low.

A week before the midterm elections, today's report showed the biggest gap in sentiment in two months among Democrats and Republicans. Republicans were more pessimistic, as were political independents, while Democrats were more upbeat.

"That may anticipate GOP turnout in a protest vote," Langer said.

Today's report also showed confidence among consumers 65 and older was the highest in seven years. Sentiment was the strongest in three months for single Americans and the highest in four months for women. U.S. homeowners comfort was the weakest in seven weeks.

Among the four U.S. regions, only those living in the South were more upbeat last week.

The Bloomberg Comfort Index has been presented on a scale of zero to 100 since May, rather than the previous minus 100 to 100, with the midpoint shifting to 50 from zero. The change is also reflected in the gauge's components. It doesn't affect the measures' relationship to each other or their correlation with other economic indicators. Historical data has been revised and analysis of trends, values and other variables also aren't affected.