Confidence among US consumers increased in May to the highest level since March 2008 as Americans became more upbeat about job prospects.
The Conference Board’s confidence index rose to 63.3, exceeding the highest estimate in a Bloomberg News survey, from a revised 57.7 in April, figures from the New York-based private research group showed. The gauge was forecast to rise to 58.5, according to the survey median. A measure of expectations surged to the highest level since August 2007.
Pessimism is beginning to fade as the expansion that began in the middle of 2009 begins to create the jobs needed to encourage Americans to spend. Confidence is still at risk of stalling as Europe’s debt crisis pushes stock prices lower and chips away at household balance sheets.
“The economy is doing better, employment is finally picking up and as a result, people are starting to feel like things are improving,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “I’m relatively optimistic that we’ll get through the European debt crisis without dire economic consequences but the jury is still out.”
Economists forecast confidence would rise from a previously reported 57.9 in April, according to the median of 72 projections in the Bloomberg survey. Estimates ranged from 53 to 62.8. Another report showed home prices in 20 US cities rose less than forecast in March from a year earlier, a sign the housing recovery is cooling.
Jobs outlook
The per cent of respondents expecting more jobs to become available increased to 20.4, the highest since December 2003, from 17.7 in April. The proportion who expect their incomes to rise over the next six months increased to 11.3 per cent from 10.5 per cent.
In contrast, the share of consumers who said jobs are currently plentiful fell to 4.6 per cent from 4.7 per cent. Those who said jobs are hard to get decreased to 43.6 per cent from 44.8 per cent.