Most Americans Since 2004 See Economy Improving as Jobs Pick Up

By
Alex Kowalski
-

Mar 22, 2012 1:45 PM GMT


More Americans this month said the
economy was improving than at any time in eight years as the job
market picked up.
The share of households viewing the economy as heading in
the right direction rose to 34 percent in March, the most since
January 2004, pushing the Bloomberg monthly expectations gauge
to a one-year high of 1. The weekly Bloomberg Comfort Index (COMFCOMF) was
minus 34.9 in the period ended March 18, down from a four-year
high of minus 33.7 over the previous seven days.
March 22 (Bloomberg) --
Applications for U.S. unemployment benefits dropped last week to the
lowest level in four years, reinforcing signs the U.S. labor market is
picking up.
Jobless claims decreased by 5,000 to 348,000 in the week ended
March 17, the fewest since February 2008, Labor Department figures
showed today in Washington. Betty Liu and Dominic Chu report on
Bloomberg Television's "In the Loop." (Source: Bloomberg)


March 21 (Bloomberg) --
Walter Todd, chief investment officer at Greenwood Capital Inc., Neil
Dutta, an economist at Bank of America Merrill Lynch, and Joseph
McAlinden, chief investment
officer at Catalpa Capital Management, talk about the outlook for the
U.S. economy, housing market and their investment strategies.
They speak with Pimm Fox on Bloomberg Television's "Taking Stock."
(Source: Bloomberg)

“The sense that things have finally stabilized has clearly
boosted confidence,” said Joseph Brusuelas, a senior economist
at Bloomberg LP in New York. “Downside risk to both the overall
level of comfort and Americans perceptions of the direction of
the economy remains” as fuel prices increase, he said.
The best six months of job growth since 2006 is probably
behind the increase in optimism, raising the odds that the
spending that accounts for about 70 percent of the economy will
strengthen. Gains in incomes and employment may be among reasons
households have so far been able to weather the jump in gasoline
prices.
The weekly comfort index has been higher than minus 40 for
the past six weeks, the longest stretch of readings above
recession levels since the first half of 2008.
The number of Americans filing applications for
unemployment benefits dropped last week to the lowest level in
four years, reinforcing signs the labor market is improving,
Labor Department figures showed today. Jobless claims decreased
by 5,000 to 348,000 in the week ended March 17, the fewest since
February 2008.
Shares Fall
Stocks fell as manufacturing contracted in Europe and
China, raising concern the global economy is slowing. The
Standard & Poor’s 500 Index dropped 0.6 percent to 1,394.25 at
9:40 a.m. in New York.
The weekly measure of Americans’ views of the state of the
economy rose to minus 64.9 last week, the best reading since
March 2008, from minus 67.1 the prior week, today’s comfort
report showed. The index of whether consumers consider it a good
time to buy dropped to minus 38.6 from minus 33.7. The personal
finances gauge fell to minus 1.3 from minus 0.5 the prior week.
The monthly expectations gauge jumped from a reading of
minus 7 in February. It was at minus 45 as recently as October.
“The unusually steep rise in expectations, alongside
improved ratings of current conditions, marks a strongly
positive trajectory for consumer sentiment after its long
slump,” Gary Langer, president of Langer Research Associates
LLC in New York, which compiles the index for Bloomberg, said in
a statement. The question remains how long sentiment “can hold
the line as the sign at the pump approaches $4,” he said.
Outlook for Unemployed
The improved chance of landing a job is helping brighten
sentiment. Confidence among the unemployed rose to minus 44 last
week, the highest since April 2008. Sentiment also climbed among
those with a college degree, rising to the highest level since
March 2008.
Payrolls grew by 227,000 in February, the third month of
gains in excess of 200,000, Labor Department data show. The
unemployment rate held at a three-year low of 8.3 percent
following five consecutive declines. Worker pay jumped in the
last six months of 2011 by the most in almost five years,
according to data from the Commerce Department.
Sentiment is improving more among men than women as the
male jobless rate falls faster. Unemployment declined 1.1
percentage points for men over the past year, compared with a
0.3 percentage-point drop for women.
Men Versus Women
Confidence among men was minus 28.2 last week, up from last
year’s low of minus 51.3 reached in September. The measure for
women, at minus 41.3, has climbed 15.2 points from its 2011 low.
Still, higher gasoline prices may be limiting gains in
confidence. The average price of regular gasoline at the pump
climbed to a 10-month high of $3.86 a gallon on March 20,
according to AAA, the nation’s largest auto club. It’s climbed
58 cents this year.
“We’re beginning to see positive signs that the economy is
improving,” Randy Potts, chairman and chief executive officer
of Winnebago Industries Inc. (WGO), said during a March 15 conference
call. “Consumer confidence has been trending higher, and the
jobless rate is improving. Both the stock market and housing
markets are showing signs of improvement, but rising fuel prices
do remain a concern.”
The Bloomberg Consumer Comfort Index is based on responses
to telephone interviews with a random sample of 1,000 consumers
18 years old and over. Each week, 250 respondents are asked for
their views on the economy, personal finances and buying
climate; the percentage of negative responses is subtracted from
the share of positive views and divided by three. The most
recent reading is based on the average of responses over the
previous four weeks.
The comfort index can range from 100, indicating every
participant in the survey had a positive response to all three
components, to minus 100, signaling all views were negative. The
margin of error for the headline reading is 3 percentage points.
Field work for the index is done by SSRS/Social Science
Research Solutions in Media, Pennsylvania.
To contact the reporter on this story:
Alex Kowalski in Washington at
akowalski13@bloomberg.net
To contact the editor responsible for this story:
Christopher Wellisz at cwellisz@bloomberg.net