(Bloomberg News) Consumer confidence in the U.S. rose last week as households became more upbeat about the state of their finances and optimism climbed among wealthier Americans.
The Bloomberg Consumer Comfort Index increased to minus 43.9 for the period ended July 10 from minus 45.5 the prior week. Even with the gain, which is within the survey's 3-point margin of error, the gauge is lower than it was at the start of the year.
While cheaper gasoline prices since May helped stabilize optimism, Americans' assessment of the U.S. economy soured to a 15-week low. The pessimism likely reflects employment gains in June that were the smallest in nine months, a possible risk to consumer spending that accounts for about 70 percent of the world's largest economy.
"Consumers are feeling a little bit better about the fact that gasoline prices have come down materially over the last several weeks," said Russell Price, a senior economist at Ameriprise Financial Services Inc. in Detroit. "But on the other side of the coin, the lack of any real traction in job growth" is also weighing on consumers.
An index of consumers' views of the economy dropped to minus 83.3, the lowest level since the end of March, from minus 80.9 the prior week. Eight percent of consumers, the fewest since March, rate the economy positively, according to today's report.
"Households report that they have little confidence in the durability of the recovery and about their own income prospects," Federal Reserve Chairman Ben S. Bernanke told Congress yesterday.
Central bankers are prepared to use policy measures to address economic weakness that could "prove more persistent than expected," Bernanke said.
A report today showed the recent weakness in the labor market may be starting to abate. Initial jobless claims fell by 22,000 to 405,000 last week, the lowest level since April, the Labor Department said in Washington. The data included fewer layoffs in the auto industry than typical this time of year, according to an agency spokesman.
On July 8 that showed U.S. employers added 18,000 jobs in June, while the unemployment rate climbed to 9.2 percent.