Post by hurricanemaxi on Dec 9, 2011 16:24:15 GMT -5
Confidence among U.S. consumers rose more than forecast in December as Americans’ outlooks improved.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 67.7, a six-month high, from 64.1 at the end of November. The median estimate of 73 economists surveyed by Bloomberg News called for a reading of 65.8. The gauge averaged 89 in the five years leading up to the recession that began in December 2007 and ended in June 2009.
Falling gasoline prices, a drop in unemployment and a rebound in stocks may be helping boost confidence, raising the odds that the pickup in household spending will continue into 2012. Nonetheless, gridlock over deficit-cutting measures in Washington and concern that a European nation will default represent roadblocks to additional gains in sentiment.
“There has been a disconnect from the almost recessionary sentiment readings and reasonably good spending numbers, and something had to give,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, who projected sentiment would rise to 68. “Spending has held in there and consumers’ negative attitudes have improved. Consumers started the holiday season strong and it looks like they will end it decently.”
Stocks rose after the report, adding to earlier gains as European leaders agreed to boost a rescue fund and tighten budget rules to stem the region’s debt crisis. The Standard & Poor’s 500 Index climbed 1.5 percent to 1,252.71 at 11:29 a.m. in New York. Treasury securities fell, pushing the yield on the benchmark 10-year note up to 2.02 percent from 1.97 percent late yesterday.
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The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 67.7, a six-month high, from 64.1 at the end of November. The median estimate of 73 economists surveyed by Bloomberg News called for a reading of 65.8. The gauge averaged 89 in the five years leading up to the recession that began in December 2007 and ended in June 2009.
Falling gasoline prices, a drop in unemployment and a rebound in stocks may be helping boost confidence, raising the odds that the pickup in household spending will continue into 2012. Nonetheless, gridlock over deficit-cutting measures in Washington and concern that a European nation will default represent roadblocks to additional gains in sentiment.
“There has been a disconnect from the almost recessionary sentiment readings and reasonably good spending numbers, and something had to give,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, who projected sentiment would rise to 68. “Spending has held in there and consumers’ negative attitudes have improved. Consumers started the holiday season strong and it looks like they will end it decently.”
Stocks rose after the report, adding to earlier gains as European leaders agreed to boost a rescue fund and tighten budget rules to stem the region’s debt crisis. The Standard & Poor’s 500 Index climbed 1.5 percent to 1,252.71 at 11:29 a.m. in New York. Treasury securities fell, pushing the yield on the benchmark 10-year note up to 2.02 percent from 1.97 percent late yesterday.
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