Consumer confidence climbed last week to a four-month high as an improving job market and holiday discounts put Americans in the mood to shop.
The Bloomberg Consumer Comfort Index rose to minus 27.4 in the period ended Dec. 22, the fifth straight gain, from minus 29.4. Other figures showed applications for unemployment benefits declined more than forecast last week to 338,000.
The report on sentiment also showed a gauge of whether it’s a good time to make purchases advanced to the second-highest level since 2007, signaling a pickup in the spending that accounts for almost 70 percent of the economy. Americans stayed upbeat about economic prospects amid more job opportunities, higher home values and record stock prices.
“Consumers are feeling a bit more buoyant heading into the new year,” said Omair Sharif, an economist at RBS Securities Inc. in Stamford, Connecticut, who projected 340,000 claims. “This isn’t surprising, given better labor-market data and low inflation. Consumer spending is going to be pretty robust in the fourth quarter.”
The Labor Department said today in Washington that first- time claims for jobless benefits dropped by 42,000 in the week ended Dec. 21. The median projection in a Bloomberg survey called for 345,000 new applications.
The figures, which followed a 75,000 increase in the previous two weeks combined, underscore the difficulty in smoothing out the fluctuations that typically occur during the year-end holidays, an agency official said as the report was released.
Stocks climbed, extending an all-time high for the Standard & Poor’s 500 Index. The S&P 500 increased 0.5 percent to 1,842.02 at the close in New York.
All three components of the weekly Bloomberg comfort index -- finances, views of the economy and the buying climate -- improved last week, today’s report showed.
“Consumer sentiment has made a round trip back to pre- government shutdown highs, largely due to modestly improved economic data, including job growth and stable gasoline prices,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York.