US consumer mood improves

4 January 2013

NEW YORK: Consumer confidence has reached its highest level for eight months in the US, new figures show.

Bloomberg, the news provider, and Langer Research Associates, the insights group, polled 1,000 adults, using a scale where 100 points marked the greatest optimism and –100 the strongest pessimism.

Their weekly barometer of popular sentiment stood at –31.8 points for the seven days to December 30, 2012, compared with –32.1 points a week earlier.

Alongside constituting an expansion of 12.9 points year on year, this reflected the highest returns secured since April.

This was also the 15th week in a row that this rating came in above the "traditional trouble zone" of –40 points or worse. For 2012 as a whole, the average rating reached –38.1 points.

While this lagged the long term norm of –15.8 points, room for positivity remains. The index covering the economic situation, for example, hit –57.1 points, the second-best score since March 2008.

"The rebuilding of wealth and modest income gains permitted consumer sentiment to overcome slow growth and a politically divisive environment in late 2012," said Joseph Brusuelas, a senior economist at Bloomberg.

Participants earning over $100k per year posted +11.8 points, the best returns for more than two years, and almost doubling the 6.6 points recorded a week earlier.

Among the major contributors to this trend were rising real estate prices and low interest rates, which offset concerns about increased taxes in 2013, according to Brusuelas.

Respondents boasting salaries above $50k logged –4.1 points, the strongest performance since January 2008. People with incomes under $15k, however, yielded a deeply negative –72.5 points.

Elsewhere, the overall reading for personal finance improved to +0.8 points from –0.5 points, the first time this total has surpassed zero points since July 2012.

One negative trend revealed by the study was that the intention to buy index came in at –39 points, down from –37.5 points the previous week.

Data sourced from Bloomberg; additional content by Warc staff