Consumers are less pessimistic about the outlook for the economy after lawmakers struck a deal last week that will ease the next round of spending cuts known as sequestration. The bill marked the first bipartisan budget produced by a divided Congress in 27 years.
The buying-climate index jumped to minus 31.8, the highest since the week ended May 5, from minus 35.5.
Economy View
The gauge assessing Americans’ views on the current state of the economy rose to minus 56.8 from minus 56.9 the prior week. The measure of consumers’ views on their personal finances advanced to 6.4, the highest since early August, from 4.2.
In a sign the job market is making progress, confidence among the unemployed improved to its highest level since January 2008, the report showed. Payrolls expanded by 203,000 workers in November after a 200,000 gain in October, according to the latest Labor Department figures. The jobless rate fell to a five-year low of 7 percent.
Record stock prices are improving household finances and building confidence, particularly among upper-income Americans.
Sentiment among those making more than $100,000 a year has averaged 12.4 so far in 2013, compared with a 0.9 average last year. For those making between $50,000 and $75,000, confidence is at its strongest since May. The S&P 500 Index has surged about 29 percent so far this year.
Housing Market
Momentum in the housing market may also be helping to sustain consumers’ spirits. Purchases of new homes exceeded projections in November, holding near a five-year high, and gains in building permit applications show demand will be sustained through the start of 2014.
New-home sales declined 2.1 percent to a 464,000 annualized pace, following a revised 474,000 rate in October that was the strongest since July 2008, figures from the Commerce Department showed earlier this week. The median forecast of 75 economists surveyed by Bloomberg called for 440,000.